Why Endeavour International (END) Stock Is Up Today

NEW YORK (TheStreet) -- Endeavour International (END) stock is popping on news its West Rochelle W1 well has returned to production. 

By early afternoon, shares had spiked 10% ton $2.19.

In a statement, the company said both West and East Rochelle wells are now flowing together and once stabilized production rates have been achieved, management may update guidance. 

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TheStreet Ratings team rates ENDEAVOUR INTERNATIONAL CORP as a Sell with a ratings score of D. TheStreet Ratings Team has this to say about their recommendation:

"We rate ENDEAVOUR INTERNATIONAL CORP (END) a SELL. This is driven by several weaknesses, which we believe should have a greater impact than any strengths, and could make it more difficult for investors to achieve positive results compared to most of the stocks we cover. The company's weaknesses can be seen in multiple areas, such as its deteriorating net income, generally high debt management risk, disappointing return on equity, weak operating cash flow and generally disappointing historical performance in the stock itself."

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

  • 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 219.4% when compared to the same quarter one year ago, falling from -$14.05 million to -$44.87 million.
  • The debt-to-equity ratio is very high at 26.87 and currently higher than the industry average, implying increased risk associated with the management of debt levels within the company.
  • 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, ENDEAVOUR INTERNATIONAL CORP's return on equity significantly trails that of both the industry average and the S&P 500.
  • Net operating cash flow has decreased to $27.55 million or 42.13% when compared to the same quarter last year. In addition, when comparing to the industry average, the firm's growth rate is much lower.
  • Despite any intermediate fluctuations, we have only bad news to report on this stock's performance over the last year: it has tumbled by 35.70%, worse than the S&P 500's performance. Consistent with the plunge in the stock price, the company's earnings per share are down 193.54% compared to the year-earlier quarter. Naturally, the overall market trend is bound to be a significant factor. However, in one sense, the stock's sharp decline last year is a positive for future investors, making it cheaper (in proportion to its earnings over the past year) than most other stocks in its industry. But due to other concerns, we feel the stock is still not a good buy right now.
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