3 Stocks Advancing The Energy Industry

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 up 7 points (0.0%) at 17,673 as of Wednesday, Feb. 4, 2015, 4:20 PM ET. The NYSE advances/declines ratio sits at 1,090 issues advancing vs. 2,000 declining with 134 unchanged.

The Energy industry as a whole closed the day down 2.4% versus the S&P 500, which was down 0.4%. Top gainers within the Energy industry included Saratoga Resources ( SARA), up 14.4%, Lucas Energy ( LEI), up 51.1%, FieldPoint Petroleum ( FPP), up 4.3%, Escalera Resources ( ESCR), up 5.5% and Superior Drilling Products ( SDPI), up 3.1%.

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

Superior Drilling Products ( SDPI) is one of the companies that pushed the Energy industry higher today. Superior Drilling Products was up $0.11 (3.1%) to $3.71 on average volume. Throughout the day, 29,684 shares of Superior Drilling Products exchanged hands as compared to its average daily volume of 21,500 shares. The stock ranged in a price between $3.55-$3.71 after having opened the day at $3.70 as compared to the previous trading day's close of $3.60.

Superior Drilling Products has a market cap of $57.1 million and is part of the services sector. Shares are down 20.7% year-to-date as of the close of trading on Tuesday.

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At the close, Lucas Energy ( LEI) was up $0.04 (51.1%) to $0.10 on heavy volume. Throughout the day, 3,966,363 shares of Lucas Energy exchanged hands as compared to its average daily volume of 389,100 shares. The stock ranged in a price between $0.08-$0.14 after having opened the day at $0.08 as compared to the previous trading day's close of $0.07.

Lucas Energy, Inc. operates as an independent oil and gas company in Texas. Lucas Energy has a market cap of $3.1 million and is part of the services sector. Shares are down 43.3% year-to-date as of the close of trading on Tuesday. 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. 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 TheStreet Ratings analysis on LEI go as follows:

  • 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 92.25%, 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, LUCAS ENERGY INC's return on equity significantly trails that of both the industry average and the S&P 500.
  • LEI, with its decline in revenue, slightly underperformed the industry average of 11.8%. Since the same quarter one year prior, revenues fell by 19.1%. The declining revenue has not hurt the company's bottom line, with increasing earnings per share.
  • LEI's debt-to-equity ratio is very low at 0.25 and is currently below that of the industry average, implying that there has been very successful management of debt levels. Even though the company has a strong debt-to-equity ratio, the quick ratio of 0.08 is very weak and demonstrates a lack of ability to pay short-term obligations.
  • The net income growth from the same quarter one year ago has exceeded that of the Oil, Gas & Consumable Fuels industry average, but is less than that of the S&P 500. The net income increased by 4.4% when compared to the same quarter one year prior, going from -$1.56 million to -$1.49 million.

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.

Saratoga Resources ( SARA) was another company that pushed the Energy industry higher today. Saratoga Resources was up $0.02 (14.4%) to $0.19 on average volume. Throughout the day, 218,322 shares of Saratoga Resources exchanged hands as compared to its average daily volume of 153,600 shares. The stock ranged in a price between $0.17-$0.22 after having opened the day at $0.17 as compared to the previous trading day's close of $0.17.

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 $5.4 million and is part of the services sector. Shares are down 23.5% year-to-date as of the close of trading on Tuesday. Currently there is 1 analyst who rates Saratoga Resources a buy, no analysts rate it a sell, and none rate it a hold.

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, generally high debt management risk, disappointing return on equity and generally disappointing historical performance in the stock itself.

Highlights from TheStreet Ratings analysis on SARA go as follows:

  • The debt-to-equity ratio is very high at 14.32 and currently higher than the industry average, implying increased risk associated with the management of debt levels within the company. Along with the unfavorable debt-to-equity ratio, SARA maintains a poor quick ratio of 0.78, which illustrates the inability to avoid short-term cash problems.
  • 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.
  • 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 79.4% when compared to the same quarter one year ago, falling from -$5.73 million to -$10.27 million.
  • Despite any intermediate fluctuations, we have only bad news to report on this stock's performance over the last year: it has tumbled by 84.77%, worse than the S&P 500's performance. Consistent with the plunge in the stock price, the company's earnings per share are down 73.68% 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.

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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