VAALCO Energy Inc Stock Downgraded (EGY)

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.

NEW YORK ( TheStreet) -- VAALCO Energy (NYSE: EGY) has been downgraded by TheStreet Ratings from buy to hold. The company's strengths can be seen in multiple areas, such as its largely solid financial position with reasonable debt levels by most measures, solid stock price performance and expanding profit margins. However, as a counter to these strengths, we also find weaknesses including unimpressive growth in net income and weak operating cash flow.

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Highlights from the ratings report include:
  • 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 3.44, which clearly demonstrates the ability to cover short-term cash needs.
  • 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. Despite the fact that it has already risen in the past year, there is currently no conclusive evidence that warrants the purchase or sale of this stock.
  • The company, on the basis of change in net income from the same quarter one year ago, has significantly underperformed when compared to that of the S&P 500 and the Oil, Gas & Consumable Fuels industry. The net income has significantly decreased by 197.9% when compared to the same quarter one year ago, falling from $7.19 million to -$7.04 million.
  • Net operating cash flow has significantly decreased to -$23.54 million or 162.48% when compared to the same quarter last year. In addition, when comparing to the industry average, the firm's growth rate is much lower.

VAALCO Energy, Inc., an independent energy company, acquires, explores for, develops, and produces crude oil and natural gas. VAALCO Energy has a market cap of $442.3 million and is part of the basic materials sector and energy industry. Shares are up 2.5% year to date as of the close of trading on Thursday.

You can view the full VAALCO Energy Ratings Report or get investment ideas from our investment research center.

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Disclosure: TheStreet's editorial policy prohibits staff editors, reporters and analysts from holding positions in any individual stocks.

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