NEW YORK ( TheStreet) -- Miller Energy Resources (NYSE: MILL) has been downgraded by TheStreet Ratings from hold to sell. 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.
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- 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, MILLER ENERGY RESOURCES INC'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 -$0.58 million or 107.64% when compared to the same quarter last year. In addition, when comparing to the industry average, the firm's growth rate is much lower.
- MILL has underperformed the S&P 500 Index, declining 19.35% from its price level of one year ago. The fact that the stock is now selling for less than others in its industry in relation to its current earnings is not reason enough to justify a buy rating at this time.
- 35.38% is the gross profit margin for MILLER ENERGY 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, MILL's net profit margin of -66.78% significantly underperformed when compared to the industry average.
- Regardless of the drop in revenue, the company managed to outperform against the industry average of 10.7%. Since the same quarter one year prior, revenues slightly dropped by 5.3%. The declining revenue has not hurt the company's bottom line, with increasing earnings per share.