Don't believe the October hype.

That's the word from Sterne Agee on the near-term direction of the stock market.

The New York-based research bank argues that the October rally in oil stocks is unsustainable. And save for an unusual and extraordinary event such as a large-scale war that might force oil prices higher, Sterne Agee analysts are skeptical that energy stocks will continue to rise. The investment bank says the global oil market remains oversupplied, and points out that liquid natural gas prices have deteriorated, prompting further concern about the oil and gas sector.

According to Sterne Agee, risk-averse investors should buy high-quality energy stocks and at the same time, buy commodity oil or oil derivatives just in case the oil and gas sector rallies in the fourth quarter

Here are the 11 U.S. stocks that Sterne Agee recommends. We've paired each of these tickers with TheStreet Ratings to give you more information as to whether you should buy, sell, or hold these stocks.

TheStreet Ratings projects a stock's total return potential over a 12-month period including both price appreciation and dividends, using a quantitative approach based on 32 major data points. The model is both objective, using elements such as volatility of past operating revenues, financial strength, and company cash flows, and subjective, including expected equities market returns, future interest rates, implied industry outlook and forecast company earnings.

Buying an S&P 500 stock that TheStreet Ratings rated a buy yielded an average 16.56% return in 2014, beating the S&P 500 Total Return Index by 304 basis points. Buying a Russell 2000 stock that TheStreet Ratings rated a buy yielded a 9.5% return in 2014, beating the Russell 2000 index, including dividends reinvested, by 460 basis points last year.

Check out which stocks made the list. And when you're done, be sure to read about which safe, A+ rated stocks you should buy now. Year-to-date returns are based on prices as of 10:37 a.m., October 19, 2015.

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CHK

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11. Chesapeake Energy

(CHK) - Get Report


Rating: Sell, D
Market Cap: $5.4 billion
Year-to-date return: -58.51%

Chesapeake Energy Corporation produces oil and natural gas through acquisition, exploration, and development of from underground reservoirs in the United States.

TheStreet Ratings team rates CHESAPEAKE ENERGY CORP as a Sell with a ratings score of D. TheStreet Ratings Team has this to say about their recommendation:

We rate CHESAPEAKE ENERGY CORP (CHK) 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 deteriorating net income, generally high debt management risk, disappointing return on equity, 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 company, on the basis of change in net income from the same quarter one year ago, has significantly underperformed when compared to that of the S&P 500 and the Oil, Gas & Consumable Fuels industry. The net income has significantly decreased by 2250.8% when compared to the same quarter one year ago, falling from $191.00 million to -$4,108.00 million.
  • The debt-to-equity ratio of 1.29 is relatively high when compared with the industry average, suggesting a need for better debt level management. Along with the unfavorable debt-to-equity ratio, CHK maintains a poor quick ratio of 0.70, which illustrates the inability to avoid short-term cash problems.
  • Return on equity has greatly decreased when compared to its ROE from the same quarter one year prior. This is a signal of major weakness within the corporation. Compared to other companies in the Oil, Gas & Consumable Fuels industry and the overall market, CHESAPEAKE ENERGY CORP's return on equity significantly trails that of both the industry average and the S&P 500.
  • Net operating cash flow has significantly decreased to $314.00 million or 76.77% when compared to the same quarter last year. In addition, when comparing to the industry average, the firm's growth rate is much lower.
  • Despite any intermediate fluctuations, we have only bad news to report on this stock's performance over the last year: it has tumbled by 53.02%, worse than the S&P 500's performance. Consistent with the plunge in the stock price, the company's earnings per share are down 2950.00% compared to the year-earlier quarter. Turning toward the future, the fact that the stock has come down in price over the past year should not necessarily be interpreted as a negative; it could be one of the factors that may help make the stock attractive down the road. Right now, however, we believe that it is too soon to buy.
  • You can view the full analysis from the report here: CHK
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CPE

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10. Callon Petroleum

(CPE) - Get Report


Rating: Hold, C
Market Cap: $554.1 million
Year-to-date return: 54.13%

Callon Petroleum Company engages in the exploration, development, acquisition, and production of oil and natural gas properties in the Permian Basin in West Texas.

TheStreet Ratings team rates CALLON PETROLEUM CO/DE as a Hold with a ratings score of C. TheStreet Ratings Team has this to say about their recommendation:

We rate CALLON PETROLEUM CO/DE (CPE) a HOLD. The primary factors that have impacted our rating are mixed - some indicating strength, some showing weaknesses, with little evidence to justify the expectation of either a positive or negative performance for this stock relative to most other stocks. The company's strengths can be seen in multiple areas, such as its good cash flow from operations, solid stock price performance and largely solid financial position with reasonable debt levels by most measures. However, as a counter to these strengths, we also find weaknesses including unimpressive growth in net income and feeble growth in the company's earnings per share.

Highlights from the analysis by TheStreet Ratings Team goes as follows:

  • Net operating cash flow has significantly increased by 52.64% to $23.86 million when compared to the same quarter last year. In addition, CALLON PETROLEUM CO/DE has also vastly surpassed the industry average cash flow growth rate of -19.60%.
  • Compared to its closing price of one year ago, CPE's share price has jumped by 59.48%, exceeding the performance of the broader market during that same time frame. Setting our sights on the months ahead, however, we feel that the stock's sharp appreciation over the last year has driven it to a price level which is now relatively expensive compared to the rest of its industry. The implication is that its reduced upside potential is not good enough to warrant further investment at this time.
  • CALLON PETROLEUM CO/DE has experienced a steep decline in earnings per share in the most recent quarter in comparison to its performance from the same quarter a year ago. This company has reported somewhat volatile earnings recently. We feel it is likely to report a decline in earnings in the coming year. During the past fiscal year, CALLON PETROLEUM CO/DE turned its bottom line around by earning $0.59 versus -$0.01 in the prior year. For the next year, the market is expecting a contraction of 83.0% in earnings ($0.10 versus $0.59).
  • The company, on the basis of change in net income from the same quarter one year ago, has significantly underperformed when compared to that of the S&P 500 and the Oil, Gas & Consumable Fuels industry. The net income has significantly decreased by 204.8% when compared to the same quarter one year ago, falling from $4.74 million to -$4.97 million.
  • You can view the full analysis from the report here: CPE
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CRZO

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9. Carrizo Oil & Gas

(CRZO) - Get Report


Rating: Hold, C
Market Cap: $2.1 billion
Year-to-date return: -4.81%

Carrizo Oil & Gas, Inc., together with its subsidiaries, engages in the exploration, development, and production of oil and gas primarily in the United States.

TheStreet Ratings team rates CARRIZO OIL & GAS INC as a Hold with a ratings score of C. TheStreet Ratings Team has this to say about their recommendation:

We rate CARRIZO OIL & GAS INC (CRZO) a HOLD. The primary factors that have impacted our rating are mixed - some indicating strength, some showing weaknesses, with little evidence to justify the expectation of either a positive or negative performance for this stock relative to most other stocks. The company's strengths can be seen in multiple areas, such as its expanding profit margins and notable return on equity. However, as a counter to these strengths, we also find weaknesses including unimpressive growth in net income, generally higher debt management risk and weak operating cash flow.

Highlights from the analysis by TheStreet Ratings Team goes as follows:

  • CRZO, with its decline in revenue, slightly underperformed the industry average of 34.5%. Since the same quarter one year prior, revenues fell by 36.2%. Weakness in the company's revenue seems to have hurt the bottom line, decreasing earnings per share.
  • The gross profit margin for CARRIZO OIL & GAS INC is currently very high, coming in at 75.60%. Despite the high profit margin, it has decreased significantly from the same period last year. Despite the mixed results of the gross profit margin, CRZO's net profit margin of -37.35% significantly underperformed when compared to the industry average.
  • 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. When compared to other companies in the Oil, Gas & Consumable Fuels industry and the overall market, CARRIZO OIL & GAS INC's return on equity is below that of both the industry average and the S&P 500.
  • The company, on the basis of change in net income from the same quarter one year ago, has significantly underperformed when compared to that of the S&P 500 and the Oil, Gas & Consumable Fuels industry. The net income has significantly decreased by 2089.3% when compared to the same quarter one year ago, falling from $2.32 million to -$46.13 million.
  • The debt-to-equity ratio of 1.07 is relatively high when compared with the industry average, suggesting a need for better debt level management. Along with this, the company manages to maintain a quick ratio of 0.24, which clearly demonstrates the inability to cover short-term cash needs.
  • You can view the full analysis from the report here: CRZO
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8. Energen

(EGN)


Rating: Sell, D+
Market Cap: $4.7 billion
Year-to-date return: -6.7%

Energen Corporation, through its subsidiary Energen Resources Corporation, explores for, develops, and produces oil, natural gas, and natural gas liquids in the United States.

TheStreet Ratings team rates ENERGEN CORP as a Sell with a ratings score of D+. TheStreet Ratings Team has this to say about their recommendation:

We rate ENERGEN CORP (EGN) 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 feeble growth in its earnings per share, unimpressive growth in net income, disappointing return on equity and weak operating cash flow.

Highlights from the analysis by TheStreet Ratings Team goes as follows:

  • ENERGEN CORP has experienced a steep decline in earnings per share in the most recent quarter in comparison to its performance from the same quarter a year ago. Earnings per share have declined over the last two years. We anticipate that this should continue in the coming year. During the past fiscal year, ENERGEN CORP reported lower earnings of $1.36 versus $1.95 in the prior year. For the next year, the market is expecting a contraction of 38.2% in earnings ($0.84 versus $1.36).
  • The company, on the basis of change in net income from the same quarter one year ago, has significantly underperformed when compared to that of the S&P 500 and the Oil, Gas & Consumable Fuels industry. The net income has significantly decreased by 1303.3% when compared to the same quarter one year ago, falling from -$7.95 million to -$111.60 million.
  • The company's current return on equity has slightly decreased from the same quarter one year prior. This implies a minor weakness in the organization. Compared to other companies in the Oil, Gas & Consumable Fuels industry and the overall market, ENERGEN CORP's return on equity significantly trails that of both the industry average and the S&P 500.
  • Net operating cash flow has decreased to $193.07 million or 21.36% when compared to the same quarter last year. In conjunction, when comparing current results to the industry average, ENERGEN CORP has marginally lower results.
  • 46.83% is the gross profit margin for ENERGEN CORP which we consider to be strong. Despite the high profit margin, it has decreased significantly from the same period last year. Despite the mixed results of the gross profit margin, EGN's net profit margin of -50.89% significantly underperformed when compared to the industry average.
  • You can view the full analysis from the report here: EGN
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FANG

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7. Diamondback Energy

(FANG) - Get Report


Rating: Hold, C
Market Cap: $4.9 billion
Year-to-date return: 22.98%

Diamondback Energy, Inc., an independent oil and natural gas company, focuses on the acquisition, development, exploration, and exploitation of onshore oil and natural gas reserves in the Permian Basin in West Texas.

TheStreet Ratings team rates DIAMONDBACK ENERGY INC as a Hold with a ratings score of C. TheStreet Ratings Team has this to say about their recommendation:

We rate DIAMONDBACK ENERGY INC (FANG) a HOLD. The primary factors that have impacted our rating are mixed - some indicating strength, some showing weaknesses, with little evidence to justify the expectation of either a positive or negative performance for this stock relative to most other stocks. The company's strengths can be seen in multiple areas, such as its solid stock price performance, good cash flow from operations and largely solid financial position with reasonable debt levels by most measures. However, as a counter to these strengths, we also find weaknesses including deteriorating net income, disappointing return on equity and feeble growth in the company's earnings per share.

Highlights from the analysis by TheStreet Ratings Team goes as follows:

  • Compared to its closing price of one year ago, FANG's share price has jumped by 26.17%, exceeding the performance of the broader market during that same time frame. Although FANG had significant growth over the past year, our hold rating indicates that we do not recommend additional investment in this stock at the current time.
  • Net operating cash flow has increased to $100.64 million or 14.05% when compared to the same quarter last year. The firm also exceeded the industry average cash flow growth rate of -19.60%.
  • The current debt-to-equity ratio, 0.36, is low and is below the industry average, implying that there has been successful management of debt levels. Although the company had a strong debt-to-equity ratio, its quick ratio of 0.81 is somewhat weak and could be cause for future problems.
  • The company, on the basis of change in net income from the same quarter one year ago, has significantly underperformed when compared to that of the S&P 500 and the Oil, Gas & Consumable Fuels industry. The net income has significantly decreased by 864.9% when compared to the same quarter one year ago, falling from $27.75 million to -$212.29 million.
  • Return on equity has greatly decreased when compared to its ROE from the same quarter one year prior. This is a signal of major weakness within the corporation. Compared to other companies in the Oil, Gas & Consumable Fuels industry and the overall market, DIAMONDBACK ENERGY INC's return on equity significantly trails that of both the industry average and the S&P 500.
  • You can view the full analysis from the report here: FANG
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GPOR

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6. Gulfport Energy

(GPOR) - Get Report


Rating: Hold, C
Market Cap: $3.7 billion
Year-to-date return: -18.83%

Gulfport Energy Corporation engages in the acquisition, exploration, exploitation, and production of natural gas, natural gas liquids (NGLs), and crude oil in the United States.

TheStreet Ratings team rates GULFPORT ENERGY CORP as a Hold with a ratings score of C. TheStreet Ratings Team has this to say about their recommendation:

We rate GULFPORT ENERGY CORP (GPOR) a HOLD. The primary factors that have impacted our rating are mixed - some indicating strength, some showing weaknesses, with little evidence to justify the expectation of either a positive or negative performance for this stock relative to most other stocks. The company's strengths can be seen in multiple areas, such as its largely solid financial position with reasonable debt levels by most measures and expanding profit margins. However, as a counter to these strengths, we also find weaknesses including a generally disappointing performance in the stock itself, deteriorating net income and disappointing return on equity.

Highlights from the analysis by TheStreet Ratings Team goes as follows:

  • GPOR's debt-to-equity ratio is very low at 0.30 and is currently below that of the industry average, implying that there has been very successful management of debt levels. To add to this, GPOR has a quick ratio of 1.97, which demonstrates the ability of the company to cover short-term liquidity needs.
  • Despite the weak revenue results, GPOR has significantly outperformed against the industry average of 34.5%. Since the same quarter one year prior, revenues slightly dropped by 1.9%. Weakness in the company's revenue seems to have hurt the bottom line, decreasing earnings per share.
  • The gross profit margin for GULFPORT ENERGY CORP is rather high; currently it is at 52.76%. Despite the high profit margin, it has decreased significantly from the same period last year. Despite the mixed results of the gross profit margin, GPOR's net profit margin of -27.89% significantly underperformed when compared to the industry average.
  • The company, on the basis of change in net income from the same quarter one year ago, has significantly underperformed when compared to that of the S&P 500 and the Oil, Gas & Consumable Fuels industry. The net income has significantly decreased by 165.5% when compared to the same quarter one year ago, falling from $47.85 million to -$31.33 million.
  • The share price of GULFPORT ENERGY CORP has not done very well: it is down 19.33% and has underperformed the S&P 500, in part reflecting the company's sharply declining earnings per share when compared to the year-earlier quarter. Looking ahead, we do not see anything in this company's numbers that would change the one-year trend. It was down over the last twelve months; and it could be down again in the next twelve. Naturally, a bull or bear market could sway the movement of this stock.
  • You can view the full analysis from the report here: GPOR
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OAS

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5. Oasis Petroleum

(OAS) - Get Report


Rating: Hold, C-
Market Cap: $1.7 billion
Year-to-date return: -27.69%

Oasis Petroleum Inc., an independent exploration and production company, focuses on the acquisition and development of unconventional oil and natural gas resources in the North Dakota and Montana regions of the Williston Basin.

TheStreet Ratings team rates OASIS PETROLEUM INC as a Hold with a ratings score of C-. TheStreet Ratings Team has this to say about their recommendation:

We rate OASIS PETROLEUM INC (OAS) a HOLD. The primary factors that have impacted our rating are mixed - some indicating strength, some showing weaknesses, with little evidence to justify the expectation of either a positive or negative performance for this stock relative to most other stocks. The company's strengths can be seen in multiple areas, such as its reasonable valuation levels and expanding profit margins. However, as a counter to these strengths, we also find weaknesses including deteriorating net income, generally higher debt management risk and disappointing return on equity.

Highlights from the analysis by TheStreet Ratings Team goes as follows:

  • The gross profit margin for OASIS PETROLEUM INC is rather high; currently it is at 66.89%. Regardless of OAS's high profit margin, it has managed to decrease from the same period last year. Despite the mixed results of the gross profit margin, OAS's net profit margin of -23.13% significantly underperformed when compared to the industry average.
  • The debt-to-equity ratio of 1.03 is relatively high when compared with the industry average, suggesting a need for better debt level management. Along with this, the company manages to maintain a quick ratio of 0.45, which clearly demonstrates the inability to cover short-term cash needs.
  • Return on equity has greatly decreased when compared to its ROE from the same quarter one year prior. This is a signal of major weakness within the corporation. When compared to other companies in the Oil, Gas & Consumable Fuels industry and the overall market, OASIS PETROLEUM INC's return on equity is below that of both the industry average and the S&P 500.
  • You can view the full analysis from the report here: OAS
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OXY

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4. Occidental Petroleum

(OXY) - Get Report


Rating: Hold, C-
Market Cap: $55.6 billion
Year-to-date return: -9.56%

Occidental Petroleum Corporation engages in the acquisition, exploration, and development of oil and gas properties in the United States and internationally. The company operates in three segments: Oil and Gas; Chemical; and Midstream, Marketing and Other.

TheStreet Ratings team rates OCCIDENTAL PETROLEUM CORP as a Hold with a ratings score of C-. TheStreet Ratings Team has this to say about their recommendation:

We rate OCCIDENTAL PETROLEUM CORP (OXY) a HOLD. The primary factors that have impacted our rating are mixed - some indicating strength, some showing weaknesses, with little evidence to justify the expectation of either a positive or negative performance for this stock relative to most other stocks. The company's strengths can be seen in multiple areas, such as its largely solid financial position with reasonable debt levels by most measures and expanding profit margins. However, as a counter to these strengths, we also find weaknesses including deteriorating net income, disappointing return on equity and weak operating cash flow.

Highlights from the analysis by TheStreet Ratings Team goes as follows:

  • OXY's debt-to-equity ratio is very low at 0.25 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 1.16, which illustrates the ability to avoid short-term cash problems.
  • 44.13% is the gross profit margin for OCCIDENTAL PETROLEUM CORP which we consider to be strong. Regardless of OXY's high profit margin, it has managed to decrease from the same period last year. Despite the mixed results of the gross profit margin, OXY's net profit margin of 5.07% compares favorably to the industry average.
  • Net operating cash flow has significantly decreased to $805.00 million or 71.92% when compared to the same quarter last year. In addition, when comparing to the industry average, the firm's growth rate is much lower.
  • Return on equity has greatly decreased when compared to its ROE from the same quarter one year prior. This is a signal of major weakness within the corporation. Compared to other companies in the Oil, Gas & Consumable Fuels industry and the overall market, OCCIDENTAL PETROLEUM CORP's return on equity significantly trails that of both the industry average and the S&P 500.
  • You can view the full analysis from the report here: OXY
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QEP

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3. QEP Resources

(QEP) - Get Report


Rating: Sell, D
Market Cap: $2.9 billion
Year-to-date return: -19.24%

QEP Resources, Inc., through its subsidiaries, operates as an exploration and production company.

TheStreet Ratings team rates QEP RESOURCES INC as a Sell with a ratings score of D. TheStreet Ratings Team has this to say about their recommendation:

We rate QEP RESOURCES INC (QEP) 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 disappointing return on equity, weak operating cash flow and generally disappointing historical performance in the stock itself.

Highlights from the analysis by TheStreet Ratings Team goes as follows:

  • Current return on equity is lower than its ROE from the same quarter one year prior. This is a clear sign of weakness within the company. Compared to other companies in the Oil, Gas & Consumable Fuels industry and the overall market, QEP RESOURCES INC's return on equity significantly trails that of both the industry average and the S&P 500.
  • Net operating cash flow has decreased to $270.10 million or 49.78% when compared to the same quarter last year. In addition, when comparing the cash generation rate to the industry average, the firm's growth is significantly lower.
  • QEP'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 26.38%, 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.
  • 37.33% is the gross profit margin for QEP RESOURCES INC which we consider to be strong. Despite the high profit margin, it has decreased significantly from the same period last year. Despite the mixed results of the gross profit margin, QEP's net profit margin of -12.53% significantly underperformed when compared to the industry average.
  • Regardless of the drop in revenue, the company managed to outperform against the industry average of 34.5%. Since the same quarter one year prior, revenues fell by 31.4%. The declining revenue has not hurt the company's bottom line, with increasing earnings per share.
  • You can view the full analysis from the report here: QEP
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RICE

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2. Rice Energy

(RICE)


Rating: Sell, D
Market Cap: $2.3 billion
Year-to-date return: -21.13%

Rice Energy Inc., an independent natural gas and oil company, engages in the acquisition, exploration, and development of natural gas, oil, and natural gas liquid (NGL) properties in the Appalachian Basin. The company operates through two segments, Exploration and Production, and Midstream.

TheStreet Ratings team rates RICE ENERGY INC as a Sell with a ratings score of D. TheStreet Ratings Team has this to say about their recommendation:

We rate RICE ENERGY INC (RICE) a SELL. This is driven by a few notable 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 generally disappointing historical performance in the stock itself, deteriorating net income and feeble growth in its earnings per share.

Highlights from the analysis by TheStreet Ratings Team goes as follows:

  • Despite any intermediate fluctuations, we have only bad news to report on this stock's performance over the last year: it has tumbled by 25.24%, worse than the S&P 500's performance. Consistent with the plunge in the stock price, the company's earnings per share are down 750.00% compared to the year-earlier quarter. Although its share price is down sharply from a year ago, do not assume that it can now be tagged as cheap and attractive. The reality is that, based on its current price in relation to its earnings, RICE is still more expensive than most of the other companies in its industry.
  • The company, on the basis of change in net income from the same quarter one year ago, has significantly underperformed when compared to that of the S&P 500 and the Oil, Gas & Consumable Fuels industry. The net income has significantly decreased by 780.3% when compared to the same quarter one year ago, falling from -$7.92 million to -$69.68 million.
  • RICE ENERGY INC has experienced a steep decline in earnings per share in the most recent quarter in comparison to its performance from the same quarter a year ago. This company has reported somewhat volatile earnings recently. We feel it is likely to report a decline in earnings in the coming year. During the past fiscal year, RICE ENERGY INC turned its bottom line around by earning $1.67 versus -$0.12 in the prior year. For the next year, the market is expecting a contraction of 94.9% in earnings ($0.09 versus $1.67).
  • RICE's debt-to-equity ratio of 0.95 is somewhat low overall, but it is high when compared to the industry average, implying that the management of the debt levels should be evaluated further. Regardless of the somewhat mixed results with the debt-to-equity ratio, the company's quick ratio of 1.19 is sturdy.
  • 47.08% is the gross profit margin for RICE ENERGY INC which we consider to be strong. Despite the high profit margin, it has decreased significantly from the same period last year. Despite the mixed results of the gross profit margin, RICE's net profit margin of -61.72% significantly underperformed when compared to the industry average.
  • You can view the full analysis from the report here: RICE
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WLL

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1. Whiting Petroleum

(WLL) - Get Report


Rating: Sell, D+
Market Cap: $4 billion
Year-to-date return: -40.52%

Whiting Petroleum Corporation, an independent oil and gas company, acquires, explores, develops, and produces crude oil, natural gas liquids, and natural gas in the Rocky Mountains and Permian Basin regions of the United States.

TheStreet Ratings team rates WHITING PETROLEUM CORP as a Sell with a ratings score of D+. TheStreet Ratings Team has this to say about their recommendation:

We rate WHITING PETROLEUM CORP (WLL) a SELL. This is driven by a few notable 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 feeble growth in its earnings per share, deteriorating net income, disappointing return on equity, weak operating cash flow and generally disappointing historical performance in the stock itself.

Highlights from the analysis by TheStreet Ratings Team goes as follows:

  • WHITING PETROLEUM CORP has experienced a steep decline in earnings per share in the most recent quarter in comparison to its performance from the same quarter a year ago. Earnings per share have declined over the last two years. We anticipate that this should continue in the coming year. During the past fiscal year, WHITING PETROLEUM CORP reported lower earnings of $0.80 versus $3.07 in the prior year. For the next year, the market is expecting a contraction of 182.5% in earnings (-$0.66 versus $0.80).
  • The company, on the basis of change in net income from the same quarter one year ago, has significantly underperformed when compared to that of the S&P 500 and the Oil, Gas & Consumable Fuels industry. The net income has significantly decreased by 198.6% when compared to the same quarter one year ago, falling from $151.44 million to -$149.27 million.
  • Return on equity has greatly decreased when compared to its ROE from the same quarter one year prior. This is a signal of major weakness within the corporation. Compared to other companies in the Oil, Gas & Consumable Fuels industry and the overall market, WHITING PETROLEUM CORP's return on equity significantly trails that of both the industry average and the S&P 500.
  • Net operating cash flow has decreased to $326.00 million or 42.58% when compared to the same quarter last year. In addition, when comparing the cash generation rate to the industry average, the firm's growth is significantly lower.
  • Despite any intermediate fluctuations, we have only bad news to report on this stock's performance over the last year: it has tumbled by 64.62%, worse than the S&P 500's performance. Consistent with the plunge in the stock price, the company's earnings per share are down 157.93% compared to the year-earlier 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.
  • You can view the full analysis from the report here: WLL