Why Bonanza Creek Energy (BCEI) Stock Is Up Today

NEW YORK (TheStreet) -- Bonanza Creek Energy (BCEI) was gaining 15.1% to $52.79 Thursday after acquiring leasehold interests in the Wattenberg Field in Weld County, Colorado.

Bonanza Creek will pay $175.5 million in cash and issue 1.1 million shares of stock for assets that consist of about 86,400 gross acres and newt production of about 700 Boe/d in the Wattenberg Field. The average working interest in the properties is 40%. The transaction is expected to close early in the third quarter with an effective date of June 1.

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TheStreet Ratings team rates BONANZA CREEK ENERGY INC as a Buy with a ratings score of B-. TheStreet Ratings Team has this to say about their recommendation:

"We rate BONANZA CREEK ENERGY INC (BCEI) a BUY. This is driven by several positive factors, 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 robust revenue growth, compelling growth in net income, good cash flow from operations, expanding profit margins and largely solid financial position with reasonable debt levels by most measures. Although no company is perfect, currently we do not see any significant weaknesses which are likely to detract from the generally positive outlook."

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

  • BCEI's very impressive revenue growth greatly exceeded the industry average of 3.3%. Since the same quarter one year prior, revenues leaped by 62.7%. 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.
  • The net income growth 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 increased by 20.2% when compared to the same quarter one year prior, going from $11.26 million to $13.53 million.
  • Net operating cash flow has significantly increased by 102.87% to $77.68 million when compared to the same quarter last year. In addition, BONANZA CREEK ENERGY INC has also vastly surpassed the industry average cash flow growth rate of 18.91%.
  • BONANZA CREEK ENERGY INC's earnings per share declined by 14.3% in the most recent quarter compared to the same quarter a year ago. This company has reported somewhat volatile earnings recently. But, we feel it is poised for EPS growth in the coming year. During the past fiscal year, BONANZA CREEK ENERGY INC increased its bottom line by earning $1.72 versus $1.11 in the prior year. This year, the market expects an improvement in earnings ($2.74 versus $1.72).
  • The gross profit margin for BONANZA CREEK ENERGY INC is currently very high, coming in at 78.15%. Regardless of BCEI's high profit margin, it has managed to decrease from the same period last year. Despite the mixed results of the gross profit margin, BCEI's net profit margin of 10.62% compares favorably to the industry average.
  • You can view the full analysis from the report here: BCEI Ratings Report

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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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