NEW YORK (TheStreet) -- Shares of Penn West Petroleum (PWE) are advancing by 6.70% to $2.07 on heavy volume in mid-afternoon trading on Thursday. The stock is getting a boost from the rally in the price of oil, which is driving other energy and related stocks higher today.
Oil prices are in the green today following Wednesday's data from the Energy Information Administration showing a decline in U.S. oil storage levels. Last week, U.S. stock piled fell by 2.7 million barrels, The Wall Street Journal reports.
U.S. oil output also declined to its lowest level since the beginning of February, 9.3 million barrels per day.
Crude oil (WTI) is up by 2.44% to $60.42 per barrel and Brent crude is rising by 1.80% to $66.20 per barrel this afternoon, according to the index provided by CNBC.com.
Separately, TheStreet Ratings team rates PENN WEST PETROLEUM LTD as a Sell with a ratings score of D. TheStreet Ratings Team has this to say about their recommendation:
"We rate PENN WEST PETROLEUM LTD (PWE) 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. The company's weaknesses can be seen in multiple areas, such as its feeble growth in its earnings per share, deteriorating net income, disappointing return on equity, weak operating cash flow and generally disappointing historical performance in the stock itself."
Highlights from the analysis by TheStreet Ratings Team goes as follows:
- PENN WEST PETROLEUM LTD 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, PENN WEST PETROLEUM LTD reported poor results of -$3.49 versus -$1.66 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 178.7% when compared to the same quarter one year ago, falling from -$89.00 million to -$248.00 million.
- 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, PENN WEST PETROLEUM LTD's return on equity significantly trails that of both the industry average and the S&P 500.
- Despite any intermediate fluctuations, we have only bad news to report on this stock's performance over the last year: it has tumbled by 77.11%, worse than the S&P 500's performance. Consistent with the plunge in the stock price, the company's earnings per share are down 172.22% 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.
- Net operating cash flow has decreased to $156.00 million or 32.75% when compared to the same quarter last year. Despite a decrease in cash flow PENN WEST PETROLEUM LTD is still fairing well by exceeding its industry average cash flow growth rate of -53.10%.
- You can view the full analysis from the report here: PWE Ratings Report