Whiting Petroleum (WLL) Stock Hits One-Year Low as Oil Prices Plunge to Five-Year Low

NEW YORK (TheStreet) -- Shares of exploration company Whiting Petroleum  (WLL) dropped more than 7% to a 52-week low of $38.55 in morning trading Monday as oil prices sank to a five-year low.

Brent crude declined to $67.53 a barrel on Monday, its lowest price since October 2009, according to BBC News. U.S. crude dropped 50 cents to $65.65 a barrel and hit an intraday low of $63.72, the lowest price since July 2009.

OPEC decided last week not to cut oil production and to keep its target at 30 million barrels per day, a move that could leave the market oversupplied. The announcement sent oil prices spiraling downward, a trend that continued into Monday.

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Separately, TheStreet Ratings team rates WHITING PETROLEUM CORP as a "buy" with a ratings score of B-. TheStreet Ratings Team has this to say about their recommendation:

"We rate WHITING PETROLEUM CORP (WLL) a BUY. This is driven by some important positives, which we believe should have a greater impact than any weaknesses, and should give investors a better performance opportunity than most stocks we cover. The company's strengths can be seen in multiple areas, such as its revenue growth, reasonable valuation levels, expanding profit margins and largely solid financial position with reasonable debt levels by most measures. We feel these strengths outweigh the fact that the company has had sub par growth in net income."

Highlights from the analysis by TheStreet Ratings Team goes as follows:

  • The revenue growth came in higher than the industry average of 6.4%. Since the same quarter one year prior, revenues rose by 13.9%. 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 gross profit margin for WHITING PETROLEUM CORP is currently very high, coming in at 76.23%. It has increased from the same quarter the previous year. Along with this, the net profit margin of 19.43% significantly outperformed against the industry average.
  • The debt-to-equity ratio is somewhat low, currently at 0.65, and is less than that of the industry average, implying that there has been a relatively successful effort in the management of debt levels. Despite the fact that WLL's debt-to-equity ratio is low, the quick ratio, which is currently 0.58, displays a potential problem in covering short-term cash needs.
  • WHITING PETROLEUM CORP's earnings per share declined by 22.8% in the most recent quarter compared to the same quarter a year ago. The company has suffered a declining pattern of earnings per share over the past year. However, we anticipate this trend reversing over the coming year. During the past fiscal year, WHITING PETROLEUM CORP reported lower earnings of $3.07 versus $3.49 in the prior year. This year, the market expects an improvement in earnings ($4.51 versus $3.07).
  • You can view the full analysis from the report here: WLL Ratings Report

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