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The Energy industry as a whole closed the day down 2.1% versus the S&P 500, which was down 1.8%. Laggards within the Energy industry included PrimeEnergy ( PNRG), down 2.7%, Houston American Energy ( HUSA), down 4.8%, WSP Holdings ( WH), down 2.5%, Lucas Energy ( LEI), down 5.0% and Pyramid Oil ( PDO), down 4.1%.

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 $0.03 (5.0%) to $0.52 on average volume. Throughout the day, 76,329 shares of Lucas Energy exchanged hands as compared to its average daily volume of 95,100 shares. The stock ranged in price between $0.50-$0.54 after having opened the day at $0.51 as compared to the previous trading day's close of $0.55.

Lucas Energy, Inc. operates as an independent oil and gas company in Texas. Lucas Energy has a market cap of $18.1 million and is part of the basic materials sector. Shares are down 43.3% year-to-date as of the close of trading on Wednesday.

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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 unimpressive growth in net income, weak operating cash flow and generally disappointing historical performance in the stock itself.

Highlights from TheStreet Ratings analysis on LEI go 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 70.3% when compared to the same quarter one year ago, falling from -$0.62 million to -$1.05 million.
  • Net operating cash flow has decreased to -$0.36 million or 28.67% when compared to the same quarter last year. In addition, when comparing the cash generation rate to the industry average, the firm's growth is significantly 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 61.19%, worse than the S&P 500's performance. Consistent with the plunge in the stock price, the company's earnings per share are down 100.00% 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.
  • Current return on equity exceeded its ROE from the same quarter one year prior. This is a clear sign of strength within the company. 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.
  • 43.57% is the gross profit margin for LUCAS ENERGY INC which we consider to be strong. Despite the high profit margin, it has decreased significantly from the same period last year. Despite the mixed results of the gross profit margin, LEI's net profit margin of -91.65% significantly underperformed when compared to the industry average.

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

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At the close, WSP Holdings ( WH) was down $0.02 (2.5%) to $0.78 on light volume. Throughout the day, 7,200 shares of WSP Holdings exchanged hands as compared to its average daily volume of 60,700 shares. The stock ranged in price between $0.76-$0.83 after having opened the day at $0.76 as compared to the previous trading day's close of $0.80.

WSP Holdings Limited, together with its subsidiaries, manufactures and sells seamless oil country tubular goods. WSP Holdings has a market cap of $16.4 million and is part of the basic materials sector. Shares are down 70.7% year-to-date as of the close of trading on Wednesday.

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TheStreet Ratings rates WSP Holdings as a sell. The company's weaknesses can be seen in multiple areas, such as its feeble growth in its earnings per share, deteriorating net income, generally high debt management risk, disappointing return on equity and poor profit margins.

Highlights from TheStreet Ratings analysis on WH go as follows:

  • WSP HOLDINGS LTD has experienced a steep decline in earnings per share in the most recent quarter in comparison to its performance from the same quarter a year ago. The company has suffered a declining pattern earnings per share over the past two years. During the past fiscal year, WSP HOLDINGS LTD reported poor results of -$4.12 versus -$3.30 in the prior year.
  • 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 Energy Equipment & Services industry. The net income has significantly decreased by 55.5% when compared to the same quarter one year ago, falling from -$16.61 million to -$25.83 million.
  • The debt-to-equity ratio is very high at 6.75 and currently higher than the industry average, implying increased risk associated with the management of debt levels within the company. Along with this, the company manages to maintain a quick ratio of 0.33, which clearly demonstrates the inability to cover short-term cash needs.
  • 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 Energy Equipment & Services industry and the overall market, WSP HOLDINGS LTD's return on equity significantly trails that of both the industry average and the S&P 500.
  • The gross profit margin for WSP HOLDINGS LTD is rather low; currently it is at 20.56%. Despite the low profit margin, it has increased significantly from the same period last year. Despite the mixed results of the gross profit margin, WH's net profit margin of -21.64% significantly underperformed when compared to the industry average.

You can view the full analysis from the report here: WSP Holdings Ratings Report

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Houston American Energy ( HUSA) was another company that pushed the Energy industry lower today. Houston American Energy was down $0.02 (4.8%) to $0.30 on heavy volume. Throughout the day, 869,299 shares of Houston American Energy exchanged hands as compared to its average daily volume of 144,800 shares. The stock ranged in price between $0.27-$0.32 after having opened the day at $0.32 as compared to the previous trading day's close of $0.32.

Houston American Energy Corp., an independent energy company, explores for, develops, and produces natural gas, crude oil, and condensate from properties located principally in the Gulf Coast area of the United States and South America. Houston American Energy has a market cap of $17.6 million and is part of the basic materials sector. Shares are up 25.9% year-to-date as of the close of trading on Wednesday.

TheStreet Ratings rates Houston American Energy as a sell. The area that we feel has been the company's primary weakness has been its disappointing return on equity.

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Highlights from TheStreet Ratings analysis on HUSA go as follows:

  • 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, HOUSTON AMERN ENERGY CORP's return on equity significantly trails that of both the industry average and the S&P 500.
  • Compared to where it was 12 months ago, the stock is up, but it has so far lagged the appreciation in the S&P 500. 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 HOUSTON AMERN ENERGY CORP is currently very high, coming in at 74.53%. 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 -504.71% is in-line with the industry average.
  • Net operating cash flow has increased to -$0.70 million or 19.70% when compared to the same quarter last year. In addition, HOUSTON AMERN ENERGY CORP has also modestly surpassed the industry average cash flow growth rate of 16.72%.
  • HUSA 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 35.70, which clearly demonstrates the ability to cover short-term cash needs.

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

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