3 Stocks Pushing The Energy Industry Lower

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The Energy industry as a whole closed the day down 1.6% versus the S&P 500, which was up 0.1%. Laggards within the Energy industry included Barnwell Industries ( BRN), down 2.0%, New Concept Energy ( GBR), down 4.5%, Saratoga Resources ( SARA), down 3.1%, Lilis Energy ( LLEX), down 8.7% and Forbes Energy Services ( FES), down 9.9%.

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 $0.61 (2.5%) to $23.88 on light volume. Throughout the day, 323,650 shares of Ecopetrol exchanged hands as compared to its average daily volume of 660,000 shares. The stock ranged in price between $23.78-$24.47 after having opened the day at $24.47 as compared to the previous trading day's close of $24.49.

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 $51.0 billion and is part of the basic materials sector. Shares are down 36.3% year-to-date as of the close of trading on Tuesday. 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 attractive valuation levels, largely solid financial position with reasonable debt levels by most measures and expanding profit margins. 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 weak operating cash flow.

Highlights from TheStreet Ratings analysis on EC go as follows:

  • The current debt-to-equity ratio, 0.45, 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 0.83 is somewhat weak and could be cause for future problems.
  • 41.90% is the gross profit margin for ECOPETROL SA which we consider to be strong. Regardless of EC's high profit margin, it has managed to decrease from the same period last year. Despite the mixed results of the gross profit margin, EC's net profit margin of 12.17% compares favorably to the industry average.
  • 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 50.5% when compared to the same quarter one year ago, falling from $2,059.01 million to $1,019.03 million.
  • Net operating cash flow has decreased to $2,807.39 million or 26.47% 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.

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

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At the close, Forbes Energy Services ( FES) was down $0.23 (9.9%) to $2.10 on heavy volume. Throughout the day, 45,663 shares of Forbes Energy Services exchanged hands as compared to its average daily volume of 29,200 shares. The stock ranged in price between $2.08-$2.35 after having opened the day at $2.27 as compared to the previous trading day's close of $2.33.

Forbes Energy Services Ltd., an independent oilfield services contractor, provides a range of well site services for oil and natural gas drilling and producing companies to develop and enhance the production of oil and natural gas in the United States. Forbes Energy Services has a market cap of $54.2 million and is part of the basic materials sector. Shares are down 24.2% year-to-date as of the close of trading on Tuesday. Currently there are no analysts who rate Forbes Energy Services a buy, no analysts rate it a sell, and 1 rates it a hold.

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TheStreet Ratings rates Forbes Energy Services as a sell. The company's weaknesses can be seen in multiple areas, such as its deteriorating net income, disappointing return on equity, poor profit margins, weak operating cash flow and generally high debt management risk.

Highlights from TheStreet Ratings analysis on FES 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 Energy Equipment & Services industry. The net income has significantly decreased by 92.8% when compared to the same quarter one year ago, falling from -$0.78 million to -$1.49 million.
  • 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. Compared to other companies in the Energy Equipment & Services industry and the overall market, FORBES ENERGY SERVICES LTD's return on equity significantly trails that of both the industry average and the S&P 500.
  • The gross profit margin for FORBES ENERGY SERVICES LTD is rather low; currently it is at 24.34%. It has decreased from the same quarter the previous year. Along with this, the net profit margin of -1.32% is significantly below that of the industry average.
  • Net operating cash flow has significantly decreased to $1.56 million or 73.02% when compared to the same quarter last year. In addition, when comparing to the industry average, the firm's growth rate is much lower.
  • The debt-to-equity ratio is very high at 2.21 and currently higher than the industry average, implying increased risk associated with the management of debt levels within the company. Regardless of the company's weak debt-to-equity ratio, FES has managed to keep a strong quick ratio of 2.40, which demonstrates the ability to cover short-term cash needs.

You can view the full analysis from the report here: Forbes Energy Services 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.

Saratoga Resources ( SARA) was another company that pushed the Energy industry lower today. Saratoga Resources was down $0.01 (3.1%) to $0.37 on light volume. Throughout the day, 57,570 shares of Saratoga Resources exchanged hands as compared to its average daily volume of 90,200 shares. The stock ranged in price between $0.35-$0.38 after having opened the day at $0.36 as compared to the previous trading day's close of $0.38.

Saratoga Resources, Inc., an independent oil and natural gas company, acquires, exploits, produces, and develops crude oil and natural gas properties in the United States. Saratoga Resources has a market cap of $11.7 million and is part of the basic materials sector. Shares are down 67.0% year-to-date as of the close of trading on Tuesday.

TheStreet Ratings rates Saratoga Resources 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, disappointing return on equity, weak operating cash flow and generally high debt management risk.

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Highlights from TheStreet Ratings analysis on SARA go as follows:

  • SARATOGA RESOURCES INC 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 reported a trend of declining earnings per share over the past two years. During the past fiscal year, SARATOGA RESOURCES INC reported poor results of -$0.85 versus -$0.13 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 Oil, Gas & Consumable Fuels industry. The net income has significantly decreased by 187.5% when compared to the same quarter one year ago, falling from -$2.31 million to -$6.65 million.
  • 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 Oil, Gas & Consumable Fuels industry and the overall market, SARATOGA RESOURCES INC's return on equity significantly trails that of both the industry average and the S&P 500.
  • Net operating cash flow has significantly decreased to $2.23 million or 79.54% when compared to the same quarter last year. In addition, when comparing to the industry average, the firm's growth rate is much 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 73.30%, worse than the S&P 500's performance. Consistent with the plunge in the stock price, the company's earnings per share are down 200.00% 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.

You can view the full analysis from the report here: Saratoga 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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