NEW YORK (TheStreet) -- Activist investor Carl Icahn, and his apparent affection for Twitter, was pushing Talisman Energy (TLM) higher for a second day on Tuesday. The Canadian oil and gas company was gaining 1.5% to $12.94 at 10:21am New York time. Trading volume had already exceeded its three-month average daily volume of 5.47 million, with 8.03 million shares having changed hands so far.
Talisman jumped 4.6% on Monday after Icahn said in a tweet that he would speak with Talisman's management about considering strategic initiatives and gaining seats on the driller's board of directors.
"Disclosed approx. 61 million share position in Talisman Energy," wrote Icahn on Monday evening. "May have conversations with mgmt [sic] re: strategic alternatives, board seats, etc." Icahn's purchase is equal to a 5.97% ownership in the company.
Icahn has previously discussed his meetings with Apple (AAPL) CEO Tim Cook on Twitter. The investor encouraged Cook to increase the company's share buyback activity, voicing his support for a "$150 billion buyback".
TheStreet Ratings team rates Talisman Energy Inc as a Sell with a ratings score of D+. TheStreet Ratings Team has this to say about their recommendation:
"We rate Talisman Energy Inc (TLM) a SELL. This is driven by a few notable weaknesses, which we believe should have a greater impact than any strengths, and could make it more difficult for investors to achieve positive results compared to most of the stocks we cover. The company's weaknesses can be seen in multiple areas, such as its feeble growth in its earnings per share, deteriorating net income, disappointing return on equity, weak operating cash flow and generally disappointing historical performance in the stock itself."
Highlights from the analysis by TheStreet Ratings Team goes as follows:
- Talisman Energy Inc has experienced a steep decline in earnings per share in the most recent quarter in comparison to its performance from the same quarter a year ago. The company has reported a trend of declining earnings per share over the past two years. During the past fiscal year, Talisman Energy Inc swung to a loss, reporting -2 cents a share vs. 31 cents a share in the prior year.
- The company, on the basis of change in net income from the same quarter one year ago, has significantly underperformed against the S&P 500 and did not exceed that of the Oil, Gas & Consumable Fuels industry. The net income has significantly decreased by 50.5% when compared to the same quarter one year ago, falling from $196 million to $97 million.
- 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. Compared to other companies in the Oil, Gas & Consumable Fuels industry and the overall market, Talisman Energy 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 $357 million or 55.87% when compared to the same quarter last year. In addition, when comparing the cash generation rate to the industry average, the firm's growth is significantly lower.
- Turning toward the future, the fact that the stock has come down in price over the past year should not necessarily be interpreted as a negative; it could be one of the factors that may help make the stock attractive down the road. Right now, however, we believe that it is too soon to buy.
- You can view the full analysis from the report here: TLM Ratings Report
Written by Keris Alison Lahiff.