3 Stocks Pushing The Energy Industry Lower

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The Energy industry as a whole closed the day down 2.1% versus the S&P 500, which was down 0.9%. Laggards within the Energy industry included PostRock Energy ( PSTR), down 2.4%, Tengasco ( TGC), down 2.3%, WSP Holdings ( WH), down 3.9%, Houston American Energy ( HUSA), down 33.7% and Escalera Resources ( ESCR), down 2.8%.

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

Houston American Energy ( HUSA) is one of the companies that pushed the Energy industry lower today. Houston American Energy was down $0.11 (33.7%) to $0.23 on heavy volume. Throughout the day, 2,308,554 shares of Houston American Energy exchanged hands as compared to its average daily volume of 162,400 shares. The stock ranged in price between $0.18-$0.32 after having opened the day at $0.32 as compared to the previous trading day's close of $0.34.

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 $18.3 million and is part of the basic materials sector. Shares are up 39.9% year-to-date as of the close of trading on Monday.

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TheStreet Ratings rates Houston American Energy as a sell. Among the areas we feel are negative, one of the most important has been a generally disappointing historical performance in the stock itself.

Highlights from TheStreet Ratings analysis on HUSA go as follows:

  • In its most recent trading session, HUSA 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. The fact that the stock is now selling for less than others in its industry in relation to its current earnings is not reason enough to justify a buy rating at this time.
  • 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.
  • 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 18.80%.
  • 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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At the close, WSP Holdings ( WH) was down $0.03 (3.9%) to $0.74 on light volume. Throughout the day, 4,377 shares of WSP Holdings exchanged hands as compared to its average daily volume of 58,800 shares. The stock ranged in price between $0.72-$0.79 after having opened the day at $0.79 as compared to the previous trading day's close of $0.77.

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 71.8% year-to-date as of the close of trading on Monday.

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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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PostRock Energy ( PSTR) was another company that pushed the Energy industry lower today. PostRock Energy was down $0.03 (2.4%) to $1.23 on light volume. Throughout the day, 11,787 shares of PostRock Energy exchanged hands as compared to its average daily volume of 30,900 shares. The stock ranged in price between $1.21-$1.27 after having opened the day at $1.25 as compared to the previous trading day's close of $1.26.

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 $39.3 million and is part of the basic materials sector. Shares are up 8.6% year-to-date as of the close of trading on Monday.

TheStreet Ratings rates PostRock Energy as a sell. The company's weaknesses can be seen in multiple areas, such as its generally high debt management risk and generally disappointing historical performance in the stock itself.

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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.
  • PSTR'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 26.64%, 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, POSTROCK ENERGY CORP's return on equity significantly trails that of both the industry average and the S&P 500.
  • 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 18.80%.

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.

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