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 1.1% versus the S&P 500, which was down 0.2%. Laggards within the Energy industry included Sonde Resources ( SOQ), down 15.8%, Lilis Energy ( LLEX), down 4.3%, WSP Holdings ( WH), down 8.9%, Lucas Energy ( LEI), down 1.6% and FieldPoint Petroleum ( FPP), down 2.5%.

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 $0.01 (1.6%) to $0.51 on light volume. Throughout the day, 38,645 shares of Lucas Energy exchanged hands as compared to its average daily volume of 92,900 shares. The stock ranged in price between $0.50-$0.52 after having opened the day at $0.51 as compared to the previous trading day's close of $0.52.

Lucas Energy, Inc. operates as an independent oil and gas company in Texas. Lucas Energy has a market cap of $17.4 million and is part of the basic materials sector. Shares are down 46.3% year-to-date as of the close of trading on Monday.

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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 62.77%, 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 $0.07 (8.9%) to $0.72 on light volume. Throughout the day, 9,916 shares of WSP Holdings exchanged hands as compared to its average daily volume of 59,200 shares. The stock ranged in price between $0.72-$0.80 after having opened the day at $0.79 as compared to the previous trading day's close of $0.79.

WSP Holdings Limited, together with its subsidiaries, manufactures and sells seamless oil country tubular goods. WSP Holdings has a market cap of $16.1 million and is part of the basic materials sector. Shares are down 71.1% 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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Sonde Resources ( SOQ) was another company that pushed the Energy industry lower today. Sonde Resources was down $0.03 (15.8%) to $0.18 on heavy volume. Throughout the day, 191,506 shares of Sonde Resources exchanged hands as compared to its average daily volume of 34,400 shares. The stock ranged in price between $0.17-$0.21 after having opened the day at $0.21 as compared to the previous trading day's close of $0.22.

Sonde Resources has a market cap of $12.9 million and is part of the basic materials sector. Shares are down 68.8% year-to-date as of the close of trading on Monday.

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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