3 Stocks Pushing The Energy Industry Lower

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.

The Energy industry as a whole closed the day down 0.4% versus the S&P 500, which was unchanged. Laggards within the Energy industry included Sonde Resources ( SOQ), down 1.7%, CKX Lands ( CKX), down 3.7%, PostRock Energy ( PSTR), down 2.0%, Lucas Energy ( LEI), down 4.3% and Escalera Resources ( ESCR), down 1.6%.

TheStreet Ratings Group would like to highlight 3 stocks that pushed the industry lower today:

Lucas Energy ( LEI) is one of the companies that pushed the Energy industry lower today. Lucas Energy was down $0.02 (4.3%) to $0.56 on light volume. Throughout the day, 52,242 shares of Lucas Energy exchanged hands as compared to its average daily volume of 113,000 shares. The stock ranged in price between $0.55-$0.59 after having opened the day at $0.57 as compared to the previous trading day's close of $0.58.

Lucas Energy, Inc. operates as an independent oil and gas company in Texas. Lucas Energy has a market cap of $19.4 million and is part of the basic materials sector. Shares are down 39.9% year-to-date as of the close of trading on Tuesday.

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TheStreet Ratings rates Lucas Energy as a sell. The company's weaknesses can be seen in multiple areas, such as its weak operating cash flow and generally disappointing historical performance in the stock itself.

Highlights from TheStreet Ratings analysis on LEI go as follows:

  • Net operating cash flow has significantly decreased to -$1.01 million or 197.34% when compared to the same quarter last year. In addition, when comparing to the industry average, the firm's growth rate is much lower.
  • LEI's stock share price has done very poorly compared to where it was a year ago: Despite any rallies, the net result is that it is down by 48.52%, which is also worse that the performance of the S&P 500 Index. Investors have so far failed to pay much attention to the earnings improvements the company has managed to achieve over the last 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.
  • The company's current return on equity greatly increased when compared to its ROE from the same quarter one year prior. This is a signal of significant strength within the corporation. Compared to other companies in the Oil, Gas & Consumable Fuels industry and the overall market, LUCAS ENERGY INC's return on equity significantly trails that of both the industry average and the S&P 500.
  • LEI, with its decline in revenue, underperformed when compared the industry average of 3.2%. Since the same quarter one year prior, revenues fell by 29.4%. The declining revenue has not hurt the company's bottom line, with increasing earnings per share.
  • LEI's debt-to-equity ratio is very low at 0.24 and is currently below that of the industry average, implying that there has been very successful management of debt levels. Even though the company has a strong debt-to-equity ratio, the quick ratio of 0.46 is very weak and demonstrates a lack of ability to pay short-term obligations.

You can view the full analysis from the report here: Lucas Energy Ratings Report

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At the close, PostRock Energy ( PSTR) was down $0.03 (2.0%) to $1.50 on heavy volume. Throughout the day, 62,428 shares of PostRock Energy exchanged hands as compared to its average daily volume of 22,400 shares. The stock ranged in price between $1.50-$1.54 after having opened the day at $1.50 as compared to the previous trading day's close of $1.53.

PostRock Energy Corporation, an independent oil and gas company, is engaged in the acquisition, exploration, development, production, and gathering of crude oil and natural gas. PostRock Energy has a market cap of $45.4 million and is part of the basic materials sector. Shares are up 31.9% year-to-date as of the close of trading on Tuesday.

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TheStreet Ratings rates PostRock Energy as a sell. Among the areas we feel are negative, one of the most important has been very high debt management risk by most measures.

Highlights from TheStreet Ratings analysis on PSTR go as follows:

  • Currently the debt-to-equity ratio of 1.69 is quite high overall and when compared to the industry average, suggesting that the current management of debt levels should be re-evaluated. Along with the unfavorable debt-to-equity ratio, PSTR maintains a poor quick ratio of 0.85, which illustrates the inability to avoid short-term cash problems.
  • The company's current return on equity greatly increased when compared to its ROE from the same quarter one year prior. This is a signal of significant strength within the corporation. Compared to other companies in the Oil, Gas & Consumable Fuels industry and the overall market, POSTROCK ENERGY CORP's return on equity significantly trails that of both the industry average and the S&P 500.
  • In its most recent trading session, PSTR has closed at a price level that was not very different from its closing price of one year earlier. This is probably due to its weak earnings growth as well as other mixed factors. Turning our attention to the future direction of the stock, we do not believe this stock offers ample reward opportunity to compensate for the risks, despite the fact that it rose over the past year.
  • The gross profit margin for POSTROCK ENERGY CORP is rather high; currently it is at 52.89%. 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 -29.00% is in-line with the industry average.
  • Net operating cash flow has significantly increased by 153.69% to $1.52 million when compared to the same quarter last year. In addition, POSTROCK ENERGY CORP has also vastly surpassed the industry average cash flow growth rate of 17.57%.

You can view the full analysis from the report here: PostRock Energy 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.

Sonde Resources ( SOQ) was another company that pushed the Energy industry lower today. Sonde Resources was down $0.01 (1.7%) to $0.33 on light volume. Throughout the day, 11,850 shares of Sonde Resources exchanged hands as compared to its average daily volume of 39,000 shares. The stock ranged in price between $0.32-$0.34 after having opened the day at $0.33 as compared to the previous trading day's close of $0.34.

Sonde Resources has a market cap of $19.1 million and is part of the basic materials sector. Shares are down 50.7% year-to-date as of the close of trading on Tuesday.

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

Highlights from TheStreet Ratings analysis on SOQ go as follows:

You can view the full analysis from the report here: Sonde Resources 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.

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