NEW YORK (TheStreet) -- Shares of Pengrowth Energy Corp. (PGH) are down by 6.37% to $2.50 in late morning trading on Wednesday, as the energy sector falls due to declining oil prices and OPEC's announcement it cut its forecast for how much oil it will need to provide in 2015, to its lowest level in 12 years.
The Organization of Petroleum Exporting Countries issued a report saying it reduced its projections for 2015 by close to 300,000 barrels a day, to 28.9 million per day, Bloomberg reports.
Data gathered by Bloomberg shows that prices are now below what 10 out of the 12 OPEC members need for their annual budgets to break even.STOCKS TO BUY: TheStreet Quant Ratings has identified a handful of stocks that can potentially TRIPLE in the next 12 months. Learn more.
Brent crude prices are lower by 3.37% to $64.59 per barrel this morning.
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 multiple weaknesses, 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 55.91%, 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