- FST'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 66.88%, 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. Despite the heavy decline in its share price, this stock is still more expensive (when compared to its current earnings) than most other companies in its industry.
- The debt-to-equity ratio of 1.44 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, FST maintains a poor quick ratio of 0.83, 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. In comparison to the other companies in the Oil, Gas & Consumable Fuels industry and the overall market, FOREST OIL CORP's return on equity is significantly below that of the industry average and is below that of the S&P 500.
- Net operating cash flow has decreased to $104.93 million or 41.79% 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 net income growth from the same quarter one year ago, has underperformed when compared to that of the S&P 500 and greatly underperformed compared to the Oil, Gas & Consumable Fuels industry average. The net income increased by 17.0% when compared to the same quarter one year prior, going from $33.25 million to $38.91 million.
NEW YORK ( TheStreet) -- Forest Oil (NYSE: FST) has been downgraded by TheStreet Ratings from hold to sell. The company's weaknesses can be seen in multiple areas, such as its generally disappointing historical performance in the stock itself, generally weak debt management, disappointing return on equity and weak operating cash flow. Highlights from the ratings report include: