On Thursday, U.S. oil prices fell below $75 a barrel for the first time in over three-years, due to an increase in global supplies and a spike in production, the Wall Street Journal reports.
For the week ended Nov. 7, U.S. oil production grew to over 9 million barrels a day. This is the first time since 1983 that output in weekly Energy Information Administration data has exceeded that level, the Journal added.STOCKS TO BUY: TheStreet Quant Ratings has identified a handful of stocks that can potentially TRIPLE in the next 12 months. Learn more.
Other oil and energy company stocks falling today include Newfield Exploration Co. (NFX) , lower by 2.42% to $32.31, Chesapeake Energy Corp. (CHK) , down by 4.14% to $22.44, and Marathon Oil Corp. (MRO) , declining by 3.06% to $31.65 this afternoon.
Separately, TheStreet Ratings team rates DENBURY RESOURCES INC as a Hold with a ratings score of C. TheStreet Ratings Team has this to say about their recommendation:
"We rate DENBURY RESOURCES INC (DNR) a HOLD. The primary factors that have impacted our rating are mixed some indicating strength, some showing weaknesses, with little evidence to justify the expectation of either a positive or negative performance for this stock relative to most other stocks. The company's strengths can be seen in multiple areas, such as its increase in net income, attractive valuation levels and good cash flow from operations. However, as a counter to these strengths, we also find weaknesses including disappointing return on equity, a generally disappointing performance in the stock itself and feeble growth in the company's earnings per share."
Highlights from the analysis by TheStreet Ratings Team goes as follows:
- The net income growth from the same quarter one year ago has significantly exceeded that of the S&P 500 and the Oil, Gas & Consumable Fuels industry. The net income increased by 163.3% when compared to the same quarter one year prior, rising from $102.05 million to $268.75 million.
- Regardless of the drop in revenue, the company managed to outperform against the industry average of 6.7%. Since the same quarter one year prior, revenues slightly dropped by 6.0%. The declining revenue has not hurt the company's bottom line, with increasing earnings per share.
- DNR'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 41.72%, 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 has slightly decreased from the same quarter one year prior. This implies a minor weakness in the organization. In comparison to the other companies in the Oil, Gas & Consumable Fuels industry and the overall market, DENBURY RESOURCES INC's return on equity is significantly below that of the industry average and is below that of the S&P 500.
- You can view the full analysis from the report here: DNR Ratings Report