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 was unchanged today versus the S&P 500, which was up 0.2%. Laggards within the Energy industry included Sonde Resources ( SOQ), down 12.5%, Barnwell Industries ( BRN), down 3.3%, WSP Holdings ( WH), down 7.8%, Escalera Resources ( ESCR), down 2.9% and KiOR ( KIOR), down 17.5%.

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

KiOR ( KIOR) is one of the companies that pushed the Energy industry lower today. KiOR was down $0.02 (17.5%) to $0.10 on heavy volume. Throughout the day, 2,220,756 shares of KiOR exchanged hands as compared to its average daily volume of 693,800 shares. The stock ranged in price between $0.10-$0.12 after having opened the day at $0.11 as compared to the previous trading day's close of $0.12.

KiOR, Inc., a renewable fuels company, produces and sells cellulosic gasoline and diesel from lignocellulosic biomass using its proprietary biomass-to-cellulosic fuel technology platform. KiOR has a market cap of $8.3 million and is part of the basic materials sector. Shares are down 92.3% year-to-date as of the close of trading on Tuesday. Currently there are no analysts who rate KiOR a buy, no analysts rate it a sell, and 1 rates it a hold.

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TheStreet Ratings rates KiOR 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 KIOR go as follows:

  • KIOR'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 94.53%, 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.
  • KIOR INC has improved earnings per share by 6.7% in the most recent quarter compared to the same quarter a year ago. This company has reported somewhat volatile earnings recently. But, we feel it is poised for EPS growth in the coming year. During the past fiscal year, KIOR INC reported poor results of -$3.20 versus -$0.92 in the prior year. This year, the market expects an improvement in earnings (-$0.92 versus -$3.20).
  • The net income growth from the same quarter one year ago has exceeded that of the S&P 500, but is less than that of the Oil, Gas & Consumable Fuels industry average. The net income increased by 2.4% when compared to the same quarter one year prior, going from -$31.34 million to -$30.59 million.
  • Net operating cash flow has increased to -$21.73 million or 14.83% when compared to the same quarter last year. The firm also exceeded the industry average cash flow growth rate of -6.58%.
  • The revenue growth greatly exceeded the industry average of 2.6%. Since the same quarter one year prior, revenues rose by 43.7%. This growth in revenue appears to have trickled down to the company's bottom line, improving the earnings per share.

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

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At the close, WSP Holdings ( WH) was down $0.06 (7.8%) to $0.71 on light volume. Throughout the day, 29,548 shares of WSP Holdings exchanged hands as compared to its average daily volume of 57,700 shares. The stock ranged in price between $0.69-$0.78 after having opened the day at $0.78 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 $15.3 million and is part of the basic materials sector. Shares are down 71.8% year-to-date as of the close of trading on Tuesday.

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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

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 $0.03 (12.5%) to $0.21 on light volume. Throughout the day, 29,960 shares of Sonde Resources exchanged hands as compared to its average daily volume of 40,000 shares. The stock ranged in price between $0.20-$0.24 after having opened the day at $0.24 as compared to the previous trading day's close of $0.24.

Sonde Resources has a market cap of $11.5 million and is part of the basic materials sector. Shares are down 65.2% 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.

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