Why Miller Energy Resources (MILL) Stock Is Up Today

NEW YORK (TheStreet) -- Miller Energy Resources (MILL) was gaining 15.7% to $6.33 Monday after SunTrust upgraded the stock to "buy" from "neutral."

The analyst firm raised its price target for Miller Energy to $10 from $8. SunTrust analyst Neal Dingmann sees Miller Energy's production growing by about 180% this year, and about 60% next year due to acquisitions and wells in Cook Inlet and North Slope.

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TheStreet Ratings team rates MILLER ENERGY RESOURCES INC as a Sell with a ratings score of D+. TheStreet Ratings Team has this to say about their recommendation:

"We rate MILLER ENERGY RESOURCES INC (MILL) 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 feeble growth in its earnings per share and disappointing return on equity."

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

  • MILLER ENERGY RESOURCES INC's earnings per share declined by 7.1% in the most recent quarter compared to the same quarter a year ago. Earnings per share have declined over the last year. We anticipate that this should continue in the coming year. During the past fiscal year, MILLER ENERGY RESOURCES INC reported poor results of -$0.60 versus -$0.47 in the prior year. For the next year, the market is expecting a contraction of 1.7% in earnings (-$0.61 versus -$0.60).
  • The company's current return on equity has slightly decreased from the same quarter one year prior. This implies a minor weakness in the organization. Compared to other companies in the Oil, Gas & Consumable Fuels industry and the overall market, MILLER ENERGY RESOURCES INC's return on equity significantly trails that of both the industry average and the S&P 500.
  • MILL's debt-to-equity ratio is very low at 0.20 and is currently below that of the industry average, implying that there has been very successful management of debt levels. Despite the fact that MILL's debt-to-equity ratio is low, the quick ratio, which is currently 0.63, displays a potential problem in covering short-term cash needs.
  • The gross profit margin for MILLER ENERGY RESOURCES INC is rather high; currently it is at 63.45%. It has increased significantly from the same period last year. Regardless of the strong results of the gross profit margin, the net profit margin of -18.65% is in-line with the industry average.
  • Net operating cash flow has significantly increased by 2001.19% to $11.10 million when compared to the same quarter last year. In addition, MILLER ENERGY RESOURCES INC has also vastly surpassed the industry average cash flow growth rate of 17.57%.
  • You can view the full analysis from the report here: MILL Ratings Report

STOCKS TO BUY: TheStreet Quant Ratings has identified a handful of stocks that can potentially TRIPLE in the next 12 months. Learn more.

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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