NEW YORK (TheStreet) -- Shares of Occidental Petroleum(OXY) - Get Report were down on the news that the Carson, California city council voted unanimously to place a 45-day moratorium on new oil and gas drilling. The moratorium stalls plans the oil company had to develop 200 new wells in the area.
The city also voted to stop negotiations for new wells with Occidental until it completed a planned spinoff of its California drilling operations. Two test wells in the area have produced enough oil that Occidental believes it can generate 6K bbl/day of oil and 3M cf/day of natural gas when peak production is reached.
This news comes on the heels of yesterdays announcement that the Shareholders Foundation was launching an investigation into potential breaches of fiduciary duty by Occidental's directors on behalf of investors.
Shares of Occidental were down 2.72% to $92.56 on Thursday.
"We rate OCCIDENTAL PETROLEUM CORP (OXY) a BUY. This is driven by several positive factors, which we believe should have a greater impact than any weaknesses, and should give investors a better performance opportunity than most stocks we cover. The company's strengths can be seen in multiple areas, such as its revenue growth, largely solid financial position with reasonable debt levels by most measures, increase in stock price during the past year, expanding profit margins and good cash flow from operations. Although no company is perfect, currently we do not see any significant weaknesses which are likely to detract from the generally positive outlook."
Highlights from the analysis by TheStreet Ratings Team goes as follows:
- OXY's revenue growth has slightly outpaced the industry average of 7.8%. Since the same quarter one year prior, revenues slightly increased by 0.0%. Growth in the company's revenue appears to have helped boost the earnings per share.
- OXY's debt-to-equity ratio is very low at 0.16 and is currently below that of the industry average, implying that there has been very successful management of debt levels. Along with the favorable debt-to-equity ratio, the company maintains an adequate quick ratio of 1.08, which illustrates the ability to avoid short-term cash problems.
- Compared to where it was a year ago today, the stock is now trading at a higher level, reflecting both the market's overall trend during that period and the fact that the company's earnings growth has been robust. Turning our attention to the future direction of the stock, it goes without saying that even the best stocks can fall in an overall down market. However, in any other environment, this stock still has good upside potential despite the fact that it has already risen in the past year.
- The gross profit margin for OCCIDENTAL PETROLEUM CORP is rather high; currently it is at 57.52%. It has increased from the same quarter the previous year. Along with this, the net profit margin of 26.62% significantly outperformed against the industry average.
- Net operating cash flow has increased to $3,141.00 million or 11.66% when compared to the same quarter last year. The firm also exceeded the industry average cash flow growth rate of -23.54%.
- You can view the full analysis from the report here: OXY Ratings Report