NEW YORK ( TheStreet) -- Advantage Oil & Gas (NYSE: AAV) has been downgraded by TheStreet Ratings from hold to sell. The company's weaknesses can be seen in multiple areas, such as its unimpressive growth in net income and weak operating cash flow.

Highlights from the ratings report include:
  • The revenue fell significantly faster than the industry average of 24.2%. Since the same quarter one year prior, revenues fell by 39.1%. Weakness in the company's revenue seems to have hurt the bottom line, decreasing earnings per share.
  • The gross profit margin for ADVANTAGE OIL & GAS LTD is rather high; currently it is at 67.00%. Despite the high profit margin, it has decreased significantly from the same period last year. Despite the mixed results of the gross profit margin, AAV's net profit margin of -8.40% significantly underperformed when compared to the industry average.
  • The return on equity has improved slightly when compared to the same quarter one year prior. This can be construed as a modest strength in the organization. Compared to other companies in the Oil, Gas & Consumable Fuels industry and the overall market, ADVANTAGE OIL & GAS LTD's return on equity significantly trails that of both the industry average and the S&P 500.
  • Net operating cash flow has decreased to $24.58 million or 49.97% when compared to the same quarter last year. In addition, when comparing to the industry average, the firm's growth rate is much lower.
  • 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 143.4% when compared to the same quarter one year ago, falling from $13.16 million to -$5.71 million.

Advantage Oil & Gas Ltd. engages in the business of oil and gas exploitation, development, acquisition, and production in the provinces of Alberta and Saskatchewan, Canada. Advantage Oil & Gas has a market cap of $1.3 billion and is part of the basic materials sector and energy industry. Shares are up 14.3% year to date as of the close of trading on Monday.

You can view the full Advantage Oil & Gas Ratings Report or get investment ideas from our investment research center.
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