NEW YORK ( TheStreet) -- Synergy Resources Corporation (AMEX: SYRG) has been downgraded by TheStreet Ratings from hold to sell. The area that we feel has been the company's primary weakness has been its feeble growth in its earnings per share.

Highlights from the ratings report include:
  • SYNERGY RESOURCES CORP 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 two years. However, we anticipate underperformance relative to this pattern in the coming year. During the past fiscal year, SYNERGY RESOURCES CORP continued to lose money by earning -$0.51 versus -$0.88 in the prior year. For the next year, the market is expecting a contraction of 3.9% in earnings (-$0.53 versus -$0.51).
  • Compared to other companies in the Oil, Gas & Consumable Fuels industry and the overall market, SYNERGY RESOURCES CORP's return on equity significantly trails that of both the industry average and the S&P 500.
  • The gross profit margin for SYNERGY RESOURCES CORP is currently very high, coming in at 90.90%. It has increased from the same quarter the previous year. Along with this, the net profit margin of 46.90% significantly outperformed against the industry average.
  • Net operating cash flow has significantly increased by 380.58% to $4.09 million when compared to the same quarter last year. In addition, SYNERGY RESOURCES CORP has also vastly surpassed the industry average cash flow growth rate of 31.83%.
  • The net income growth from the same quarter one year ago has significantly exceeded that of the S&P 500 and the Oil, Gas & Consumable Fuels industry. The net income increased by 125.1% when compared to the same quarter one year prior, rising from -$6.34 million to $1.59 million.

Synergy Resources Corporation engages in the acquisition, exploitation, exploration, development, and production of oil and natural gas properties primarily located in the Wattenberg field in Denver-Julesburg Basin in northeast Colorado. Synergy has a market cap of $103.2 million and is part of the basic materials sector and energy industry. Shares are up 3.5% year to date as of the close of trading on Tuesday.

You can view the full Synergy Ratings Report or get investment ideas from our investment research center.
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