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 unchanged. Laggards within the Energy industry included Barnwell Industries ( BRN), down 4.3%, Enerjex Resources ( ENRJ), down 7.6%, Tengasco ( TGC), down 2.3%, Houston American Energy ( HUSA), down 7.9% and Lilis Energy ( LLEX), down 6.1%.

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

Ecopetrol ( EC) is one of the companies that pushed the Energy industry lower today. Ecopetrol was down $0.69 (2.6%) to $26.11 on light volume. Throughout the day, 385,316 shares of Ecopetrol exchanged hands as compared to its average daily volume of 539,300 shares. The stock ranged in price between $26.10-$27.48 after having opened the day at $26.86 as compared to the previous trading day's close of $26.80.

Ecopetrol S.A., an integrated oil company, is engaged in the exploration, development, and production of crude oil and natural gas primarily in Colombia, Peru, Brazil, and the United States Gulf Coast. Ecopetrol has a market cap of $56.4 billion and is part of the basic materials sector. Shares are down 30.3% year-to-date as of the close of trading on Friday. Currently there is 1 analyst who rates Ecopetrol a buy, 3 analysts rate it a sell, and 1 rates it a hold.

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TheStreet Ratings rates Ecopetrol as a hold. The company's strengths can be seen in multiple areas, such as its revenue growth, attractive valuation levels and good cash flow from operations. However, as a counter to these strengths, we also find weaknesses including feeble growth in the company's earnings per share, deteriorating net income and disappointing return on equity.

Highlights from TheStreet Ratings analysis on EC go as follows:

  • The revenue growth came in higher than the industry average of 1.9%. Since the same quarter one year prior, revenues rose by 14.3%. This growth in revenue does not appear to have trickled down to the company's bottom line, displayed by a decline in earnings per share.
  • The current debt-to-equity ratio, 0.41, is low and is below the industry average, implying that there has been successful management of debt levels. Although the company had a strong debt-to-equity ratio, its quick ratio of 0.75 is somewhat weak and could be cause for future problems.
  • ECOPETROL SA's earnings per share declined by 6.2% in the most recent quarter compared to the same quarter a year ago. Earnings per share have declined over the last two years. We anticipate that this should continue in the coming year. During the past fiscal year, ECOPETROL SA reported lower earnings of $3.31 versus $4.10 in the prior year. For the next year, the market is expecting a contraction of 10.4% in earnings ($2.97 versus $3.31).
  • The company, on the basis of change in net income from the same quarter one year ago, has underperformed when compared to that of the S&P 500 and greatly underperformed compared to the Oil, Gas & Consumable Fuels industry average. The net income has decreased by 6.4% when compared to the same quarter one year ago, dropping from $1,666.53 million to $1,559.52 million.

You can view the full analysis from the report here: Ecopetrol 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.

At the close, Houston American Energy ( HUSA) was down $0.02 (7.9%) to $0.23 on light volume. Throughout the day, 93,787 shares of Houston American Energy exchanged hands as compared to its average daily volume of 193,500 shares. The stock ranged in price between $0.23-$0.25 after having opened the day at $0.23 as compared to the previous trading day's close of $0.25.

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 $13.1 million and is part of the basic materials sector. Shares are up 0.6% year-to-date as of the close of trading on Friday.

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TheStreet Ratings rates Houston American 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 HUSA go as follows:

  • Net operating cash flow has significantly decreased to -$0.42 million or 135.29% when compared to the same quarter last year. In addition, when comparing to the industry average, the firm's growth rate is much lower.
  • HUSA has underperformed the S&P 500 Index, declining 7.41% from its price level of one year ago. 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 rather high; currently it is at 67.16%. 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 -1020.89% is in-line with the industry average.
  • 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 53.71, 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

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

Enerjex Resources ( ENRJ) was another company that pushed the Energy industry lower today. Enerjex Resources was down $0.38 (7.6%) to $4.58 on light volume. Throughout the day, 1,597 shares of Enerjex Resources exchanged hands as compared to its average daily volume of 4,900 shares. The stock ranged in price between $4.46-$4.74 after having opened the day at $4.74 as compared to the previous trading day's close of $4.96.

Enerjex Resources has a market cap of $40.3 million and is part of the basic materials sector. Shares are down 39.9% year-to-date as of the close of trading on Friday.

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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