NEW YORK (TheStreet) -- Vaalco Energy (EGY) stock is trading lower Wednesday after filing for a shelf registration which would allow it to sell up to $500 million worth of common stock or debt securities.
By late afternoon, shares had tumbled 9.1% to $7.06.
In its SEC filing, the company said net proceeds could be used for the "reduction or refinancing of debt or other corporate obligations; potential future acquisitions; capital expenditures; and additions to our working capital."
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TheStreet Ratings team rates VAALCO ENERGY INC as a Buy with a ratings score of B. TheStreet Ratings Team has this to say about their recommendation:
"We rate VAALCO ENERGY INC (EGY) 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, impressive record of earnings per share growth, compelling growth in net income and expanding profit margins. We feel these strengths outweigh the fact that the company shows weak operating cash flow."
Highlights from the analysis by TheStreet Ratings Team goes as follows:
- The revenue growth came in higher than the industry average of 3.1%. Since the same quarter one year prior, revenues slightly increased by 8.8%. Growth in the company's revenue appears to have helped boost the earnings per share.
- EGY 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. Along with this, the company maintains a quick ratio of 3.59, which clearly demonstrates the ability to cover short-term cash needs.
- VAALCO ENERGY INC reported significant earnings per share improvement in the most recent quarter compared to the same quarter a year ago. The company has demonstrated a pattern of positive earnings per share growth over the past two years. We feel that this trend should continue. During the past fiscal year, VAALCO ENERGY INC increased its bottom line by earning $0.73 versus $0.01 in the prior year. This year, the market expects an improvement in earnings ($1.08 versus $0.73).
- The net income growth from the same quarter one year ago has significantly exceeded that of the S&P 500 and the Oil, Gas & Consumable Fuels industry. The net income increased by 239.4% when compared to the same quarter one year prior, rising from -$18.92 million to $26.38 million.
- The gross profit margin for VAALCO ENERGY INC is currently very high, coming in at 85.18%. It has increased from the same quarter the previous year. Along with this, the net profit margin of 45.25% significantly outperformed against the industry average.
- You can view the full analysis from the report here: EGY Ratings Report