3 Energy Stocks Nudging The Industry Higher

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.

Two out of the three major indices are trading lower today with the Dow Jones Industrial Average ( ^DJI) trading down 78.22 points (-0.4%) at 17,774 as of Tuesday, Dec. 9, 2014, 3:25 PM ET. The NYSE advances/declines ratio sits at 1,227 issues advancing vs. 1,763 declining with 144 unchanged.

The Energy industry as a whole closed the day up 3.1% versus the S&P 500, which was down 0.2%. Top gainers within the Energy industry included Enerjex Resources ( ENRJ), up 7.1%, Lucas Energy ( LEI), up 33.1%, PostRock Energy ( PSTR), up 6.1%, Lilis Energy ( LLEX), up 5.9% and FieldPoint Petroleum ( FPP), up 6.8%.

TheStreet Ratings Group would like to highlight 3 stocks pushing the industry higher today:

PostRock Energy ( PSTR) is one of the companies that pushed the Energy industry higher today. PostRock Energy was up $0.03 (6.1%) to $0.54 on light volume. Throughout the day, 18,721 shares of PostRock Energy exchanged hands as compared to its average daily volume of 37,500 shares. The stock ranged in a price between $0.51-$0.56 after having opened the day at $0.55 as compared to the previous trading day's close of $0.51.

PostRock Energy Corporation, an independent oil and gas company, is engaged in the acquisition, exploration, development, production, and gathering of crude oil and natural gas. PostRock Energy has a market cap of $31.6 million and is part of the basic materials sector. Shares are down 55.9% year-to-date as of the close of trading on Monday. Currently there are no analysts who rate PostRock Energy a buy, no analysts rate it a sell, and none rate it a hold.

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TheStreet Ratings rates PostRock Energy as a sell. The company's weaknesses can be seen in multiple areas, such as its generally high debt management risk, weak operating cash flow and generally disappointing historical performance in the stock itself.

Highlights from TheStreet Ratings analysis on PSTR go as follows:

  • The debt-to-equity ratio of 1.27 is relatively high when compared with the industry average, suggesting a need for better debt level management. To add to this, PSTR has a quick ratio of 0.56, this demonstrates the lack of ability of the company to cover short-term liquidity needs.
  • Net operating cash flow has decreased to $5.71 million or 25.62% 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.
  • PSTR'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 65.45%, 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 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, POSTROCK ENERGY CORP's return on equity significantly trails that of both the industry average and the S&P 500.
  • 49.25% is the gross profit margin for POSTROCK ENERGY CORP which we consider to be strong. It has increased from the same quarter the previous year. Along with this, the net profit margin of 28.15% significantly outperformed against the industry average.

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

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At the close, Lucas Energy ( LEI) was up $0.04 (33.1%) to $0.15 on heavy volume. Throughout the day, 360,095 shares of Lucas Energy exchanged hands as compared to its average daily volume of 147,300 shares. The stock ranged in a price between $0.10-$0.15 after having opened the day at $0.12 as compared to the previous trading day's close of $0.12.

Lucas Energy, Inc. operates as an independent oil and gas company in Texas. Lucas Energy has a market cap of $4.5 million and is part of the basic materials sector. Shares are down 86.5% year-to-date as of the close of trading on Monday. Currently there are no analysts who rate Lucas Energy a buy, no analysts rate it a sell, and none rate it a hold.

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

TheStreet Ratings rates Lucas Energy as a sell. The company's weaknesses can be seen in multiple areas, such as its unimpressive growth in net income and generally disappointing historical performance in the stock itself.

Highlights from TheStreet Ratings analysis on LEI 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 Oil, Gas & Consumable Fuels industry. The net income has significantly decreased by 32.7% when compared to the same quarter one year ago, falling from -$0.95 million to -$1.25 million.
  • LEI'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 83.51%, which is also worse than the performance of the S&P 500 Index. 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, LUCAS ENERGY INC's return on equity significantly trails that of both the industry average and the S&P 500.
  • 44.06% is the gross profit margin for LUCAS ENERGY INC which we consider to be strong. Despite the high profit margin, it has decreased significantly from the same period last year. Despite the mixed results of the gross profit margin, LEI's net profit margin of -133.12% significantly underperformed when compared to the industry average.
  • The revenue fell significantly faster than the industry average of 6.3%. Since the same quarter one year prior, revenues fell by 36.4%. Weakness in the company's revenue seems to not be hurting the bottom line, shown by stable earnings per share.

You can view the full analysis from the report here: Lucas 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 higher today. Enerjex Resources was up $0.17 (7.1%) to $2.59 on average volume. Throughout the day, 6,591 shares of Enerjex Resources exchanged hands as compared to its average daily volume of 6,400 shares. The stock ranged in a price between $2.52-$2.69 after having opened the day at $2.59 as compared to the previous trading day's close of $2.42.

Enerjex Resources has a market cap of $24.9 million and is part of the basic materials sector. Shares are down 60.5% year-to-date as of the close of trading on Monday.

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.

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