Shares of Magnum Resources rose 5.6% to $7.68 Thursday. The oil and gas company gained 82.9% in the past 6 months, and added 78.9% over the past year. Magnum Hunter hit a 52-week high of $7.84 on Oct. 28, 2013. More than 11.4 million shares of Magnum Hunter were traded Thursday, well above its average daily trading volume of 4.8 million shares.MHR data by YCharts
TheStreet Ratings team rates Magnum Hunter Resources as a Hold with a ratings score of C-. The team has this to say about its recommendation:
"We rate MAGNUM HUNTER RESOURCES CORP (MHR) a HOLD. The primary factors that have impacted our rating are mixed - some indicating strength, some showing weaknesses, with little evidence to justify the expectation of either a positive or negative performance for this stock relative to most other stocks. The company's strengths can be seen in multiple areas, such as its robust revenue growth, solid stock price performance and good cash flow from operations. However, as a counter to these strengths, we also find weaknesses including deteriorating net income, generally higher debt management risk and disappointing return on equity."
Highlights from the analysis by TheStreet Ratings Team goes as follows:
- MHR's very impressive revenue growth greatly exceeded the industry average of 5.6%. Since the same quarter one year prior, revenues leaped by 100.7%. This growth in revenue does not appear to have trickled down to the company's bottom line, displayed by a decline in earnings per share.
- Compared to its closing price of one year ago, MHR's share price has jumped by 77.10%, exceeding the performance of the broader market during that same time frame. Regarding the stock's future course, our hold rating indicates that we do not recommend additional investment in this stock despite its gains in the past year.
- The gross profit margin for MAGNUM HUNTER RESOURCES CORP is rather high; currently it is at 53.28%. Regardless of MHR's high profit margin, it has managed to decrease from the same period last year. Despite the mixed results of the gross profit margin, MHR's net profit margin of -406.50% significantly underperformed when compared to the industry average.
- The debt-to-equity ratio of 1.03 is relatively high when compared with the industry average, suggesting a need for better debt level management. To add to this, MHR has a quick ratio of 0.52, this demonstrates the lack of ability of the company to cover short-term liquidity needs.
- 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, MAGNUM HUNTER RESOURCES CORP's return on equity significantly trails that of both the industry average and the S&P 500.
- You can view the full analysis from the report here: MHR Ratings Report