NEW YORK (TheStreet) -- Shares of Pengrowth Energy (PGH) are sinking, down 7.54% to $2.82 in midday trading Thursday, after state-run oil company Saudi Aramco lowered January prices for its oil in the U.S. by between 10 cents to 90 cents a barrel, sending oil prices down to continue their decline, the Wall Street Journal reports.
Brent crude is falling, down 0.79% to $69.37 per barrel. In June, prices were as high as $115 per barrel.
Another factor weighing down oil prices today could be the remarks of European Central Bank president Mario Draghi, after the ECB's monetary policy decision to keep rates unchanged, Business Insider reports.
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Draghi hinted that the bank may act early in 2015 as the ECB will reassess its current stimulus program, and how low oil prices are affecting the European economy, the Miami Herald reports.
Last week, the Organization of Petroleum Exporting Countries decided to maintain its output ceiling of oil, keeping its target at 30 million barrels per day instead of cutting production to raise prices, Bloomberg reported.
Pengrowth is engaged in the development, production and acquisition, and the exploration for oil and natural gas reserves.
Separately, TheStreet Ratings team rates PENGROWTH ENERGY CORP as a Sell with a ratings score of D+. TheStreet Ratings Team has this to say about their recommendation:
"We rate PENGROWTH ENERGY CORP (PGH) a SELL. This is driven by a number of negative factors, which we believe should have a greater impact than any strengths, and could make it more difficult for investors to achieve positive results compared to most of the stocks we cover. 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 the analysis by TheStreet Ratings Team goes as follows:
- PGH'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 39.21%, 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 return on equity has improved slightly when compared to the same quarter one year prior. This can be construed as a modest strength in the organization. Compared to other companies in the Oil, Gas & Consumable Fuels industry and the overall market, PENGROWTH ENERGY CORP's return on equity significantly trails that of both the industry average and the S&P 500.
- PENGROWTH ENERGY CORP reported significant earnings per share improvement in the most recent quarter compared to the same quarter a year ago. This company has not demonstrated a clear trend in earnings over the past 2 years, making it difficult to accurately predict earnings for the coming year. During the past fiscal year, PENGROWTH ENERGY CORP swung to a loss, reporting -$0.61 versus $0.04 in the prior year.
- The current debt-to-equity ratio, 0.49, is low and is below the industry average, implying that there has been successful management of debt levels. Even though the company has a strong debt-to-equity ratio, the quick ratio of 0.34 is very weak and demonstrates a lack of ability to pay short-term obligations.
- The gross profit margin for PENGROWTH ENERGY CORP is currently very high, coming in at 72.54%. It has increased significantly from the same period last year. Along with this, the net profit margin of 13.16% is above that of the industry average.
- You can view the full analysis from the report here: PGH Ratings Report