Warren Resources (WRES) Stock Surges on Heavy Volume

NEW YORK (TheStreet) -- Warren Resources (WRES) stock is surging on heavier-than-normal trading volume on Thursday. 

By midafternoon, shares of the crude oil and gas producer had spiked 8.2% to $5.20. 

Trading volume of 1.9 million was more than double its three-month daily average.

Year to date, the stock is up 65.6%. 

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TheStreet Ratings team rates WARREN RESOURCES INC as a Hold with a ratings score of C+. TheStreet Ratings Team has this to say about their recommendation:

"We rate WARREN RESOURCES INC (WRES) 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 revenue growth, solid stock price performance and expanding profit margins. However, as a counter to these strengths, we find that the growth in the company's earnings per share has not been good."

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

  • WRES's revenue growth has slightly outpaced the industry average of 7.7%. Since the same quarter one year prior, revenues slightly increased by 2.2%. 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, WRES's share price has jumped by 52.75%, 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 current debt-to-equity ratio, 0.43, is low and is below the industry average, implying that there has been successful management of debt levels. Although the company had a strong debt-to-equity ratio, its quick ratio of 0.75 is somewhat weak and could be cause for future problems.
  • The change in net income from the same quarter one year ago has significantly exceeded that of the Oil, Gas & Consumable Fuels industry average, but is less than that of the S&P 500. The net income has decreased by 8.2% when compared to the same quarter one year ago, dropping from $4.04 million to $3.71 million.
  • WARREN RESOURCES INC's earnings per share declined by 16.7% in the most recent quarter compared to the same quarter a year ago. This company has reported somewhat volatile earnings recently. We feel it is likely to report a decline in earnings in the coming year. During the past fiscal year, WARREN RESOURCES INC increased its bottom line by earning $0.42 versus $0.21 in the prior year. For the next year, the market is expecting a contraction of 7.1% in earnings ($0.39 versus $0.42).
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