NEW YORK (TheStreet) -- Shares of WPX Energy (WPX) - Get Report are falling by 4.88% to $6.53 in early afternoon trading on Tuesday, as the decline in oil prices sends some energy and related stocks tumbling today.
Oil prices are declining, extending losses into a third week, due to concerns regarding the global supply glut and inventory data out of the U.S. that is expected to show another rise in crude stocks, Reuters reports.
WPX Energy is a Tulsa-based natural gas and oil exploration and production company.
Crude oil (WTI) is down by 2.11% to $43.05 this afternoon and Brent crude is slipping by 1.64% to $46.76 per barrel, according to the CNBC.com index.
Commercial crude supplies in the U.S. are expected to have risen for a fifth consecutive week, Reuters added, by an average of 3 million barrels. This would bring the total to 479.6 million barrels as of the week ended October 23.
U.S. congressional leaders had suggested selling 58 million barrels of oil from the emergency reserves in order to help pay for a budget deal, which is also weighing on prices today.
Separately, TheStreet Ratings team rates WPX ENERGY INC as a Sell with a ratings score of D+. TheStreet Ratings Team has this to say about their recommendation:
We rate WPX ENERGY INC (WPX) a SELL. This is driven by several weaknesses, which we believe should have a greater impact than any strengths, and could make it more difficult for investors to achieve positive results compared to most of the stocks we cover. The company's weaknesses can be seen in multiple areas, such as its poor profit margins, weak operating cash flow and generally disappointing historical performance in the stock itself.
Highlights from the analysis by TheStreet Ratings Team goes as follows:
- The gross profit margin for WPX ENERGY INC is currently lower than what is desirable, coming in at 30.28%. It has decreased significantly from the same period last year. Along with this, the net profit margin of -10.56% is significantly below that of the industry average.
- Net operating cash flow has decreased to $236.00 million or 24.84% when compared to the same quarter last year. In conjunction, when comparing current results to the industry average, WPX ENERGY INC has marginally lower results.
- WPX's stock share price has done very poorly compared to where it was a year ago: Despite any rallies, the net result is that it is down by 59.44%, which is also worse that the performance of the S&P 500 Index. Investors have so far failed to pay much attention to the earnings improvements the company has managed to achieve over the last quarter. Naturally, the overall market trend is bound to be a significant factor. However, in one sense, the stock's sharp decline last year is a positive for future investors, making it cheaper (in proportion to its earnings over the past year) than most other stocks in its industry. But due to other concerns, we feel the stock is still not a good buy right now.
- The company's current return on equity greatly increased when compared to its ROE from the same quarter one year prior. This is a signal of significant strength within the corporation. In comparison to the other companies in the Oil, Gas & Consumable Fuels industry and the overall market, WPX ENERGY INC's return on equity is significantly below that of the industry average and is below that of the S&P 500.
- WPX ENERGY INC reported significant earnings per share improvement in the most recent quarter compared to the same quarter a year ago. The company has demonstrated a pattern of positive earnings per share growth over the past year. However, we anticipate underperformance relative to this pattern in the coming year. During the past fiscal year, WPX ENERGY INC turned its bottom line around by earning $0.62 versus -$5.43 in the prior year. For the next year, the market is expecting a contraction of 136.3% in earnings (-$0.23 versus $0.62).
- You can view the full analysis from the report here: WPX