Why Gran Tierra Energy (GTE) Is Up Today

NEW YORK (TheStreet) -- TD Securities upgraded Gran Tierra Energy  (GTE) to "buy" from "hold" and increased its target price to C$10.50 from C$9.50.

The stock rose 5.91% to $7.53 at 12:08 p.m. on Thursday.

STOCKS TO BUY: TheStreet Quant Ratings has identified a handful of stocks that can potentially TRIPLE in the next 12 months. Learn more.

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Separately, TheStreet Ratings team rates GRAN TIERRA ENERGY INC as a "buy" with a ratings score of B. TheStreet Ratings Team has this to say about their recommendation:

"We rate GRAN TIERRA ENERGY INC (GTE) a BUY. This is driven by a number of strengths, which we believe should have a greater impact than any weaknesses, and should give investors a better performance opportunity than most stocks we cover. The company's strengths can be seen in multiple areas, such as its revenue growth, largely solid financial position with reasonable debt levels by most measures, good cash flow from operations, increase in stock price during the past year and expanding profit margins. We feel these strengths outweigh the fact that the company has had sub par growth in net income."

Highlights from the analysis by TheStreet Ratings Team goes as follows:

  • The revenue growth came in higher than the industry average of 7.8%. Since the same quarter one year prior, revenues slightly increased by 9.5%. 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.
  • GTE 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, GTE has a quick ratio of 1.84, which demonstrates the ability of the company to cover short-term liquidity needs.
  • Net operating cash flow has increased to $171.77 million or 22.35% when compared to the same quarter last year. The firm also exceeded the industry average cash flow growth rate of -23.54%.
  • Compared to where it was a year ago today, the stock is now trading at a higher level, regardless of the company's weak earnings results. Turning our attention to the future direction of the stock, it goes without saying that even the best stocks can fall in an overall down market. However, in any other environment, this stock still has good upside potential despite the fact that it has already risen in the past year.
  • GRAN TIERRA 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. This company has not demonstrated a clear trend in earnings over the past 2 years, making it difficult to accurately predict earnings for the coming year. During the past fiscal year, GRAN TIERRA ENERGY INC increased its bottom line by earning $0.45 versus $0.36 in the prior year.
  • You can view the full analysis from the report here: GTE Ratings Report

STOCKS TO BUY: TheStreet Quant Ratings has identified a handful of stocks that can potentially TRIPLE in the next 12 months. Learn more.

Editor's Note: Any reference to TheStreet Ratings and its underlying recommendation does not reflect the opinion of TheStreet, Inc. or any of its contributors including Jim Cramer or Stephanie Link.

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