Credo Petroleum Corporation Stock Upgraded (CRED)

NEW YORK ( TheStreet) -- Credo Petroleum Corporation (Nasdaq: CRED) has been upgraded by TheStreet Ratings from hold to buy. The company's strengths can be seen in multiple areas, such as its robust revenue growth, largely solid financial position with reasonable debt levels by most measures, expanding profit margins, good cash flow from operations and compelling growth in net income. Although the company may harbor some minor weaknesses, we feel they are unlikely to have a significant impact on results.

Highlights from the ratings report include:
  • CRED's very impressive revenue growth exceeded the industry average of 36.9%. Since the same quarter one year prior, revenues leaped by 53.9%. Growth in the company's revenue appears to have helped boost the earnings per share.
  • CRED has no debt to speak of therefore resulting in a debt-to-equity ratio of zero, which we consider to be a relatively favorable sign. To add to this, CRED has a quick ratio of 1.88, which demonstrates the ability of the company to cover short-term liquidity needs.
  • The gross profit margin for CREDO PETROLEUM CORP is currently very high, coming in at 77.20%. It has increased from the same quarter the previous year. Along with this, the net profit margin of 38.00% significantly outperformed against the industry average.
  • Net operating cash flow has significantly increased by 231.85% to $4.35 million when compared to the same quarter last year. In addition, CREDO PETROLEUM CORP has also vastly surpassed the industry average cash flow growth rate of 32.28%.
  • 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 207.6% when compared to the same quarter one year prior, rising from $0.56 million to $1.71 million.

CREDO Petroleum Corporation, together with its subsidiaries, engages in the acquisition, exploration, development, and marketing of oil and gas properties in the Mid-Continent and Rocky Mountain regions of the United States. The company has a P/E ratio of 42.7, above the average energy industry P/E ratio of 41 and above the S&P 500 P/E ratio of 17.7. Credo has a market cap of $107.1 million and is part of the basic materials sector and energy industry. Shares are up 4.6% year to date as of the close of trading on Monday.

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