NEW YORK (TheStreet) -- Shares of Cimarex Energy (XEC) are trading up by 0.29% to $119.20 in after-hours trading on Tuesday amid rising oil prices due to forecasts of an overall slowdown in U.S. crude production expected later in the year.
Crude oil (WTI) rose by 3.08% to $59.93 per barrel and Bent crude advanced by 3.09% to $64.64 per barrel, according to the CNBC.com index.
While oil output in May was at its highest monthly output in more than four decades, production is supposed to slow down during the second half of the year, the U.S. government said, according to MarketWatch.
Late Monday, the U.S. Energy Information Administration released its drilling productivity report, showing that oil production in the seven top shale regions is expected to fall by 91,000 barrels a day to 5.5 million barrels a day in July compared to June, The Wall Street Journal reports.
Separately, TheStreet Ratings team rates CIMAREX ENERGY CO as a Hold with a ratings score of C+. TheStreet Ratings Team has this to say about their recommendation:
"We rate CIMAREX ENERGY CO (XEC) a HOLD. The primary factors that have impacted our rating are mixed, some indicating strength, some showing weaknesses, with little evidence to justify the expectation of either a positive or negative performance for this stock relative to most other stocks. Among the primary strengths of the company is its solid financial position based on a variety of debt and liquidity measures that we have evaluated. At the same time, however, we also find weaknesses including feeble growth in the company's earnings per share, deteriorating net income and disappointing return on equity."
Highlights from the analysis by TheStreet Ratings Team goes as follows:
- The current debt-to-equity ratio, 0.37, is low and is below the industry average, implying that there has been successful management of debt levels. Although the company had a strong debt-to-equity ratio, its quick ratio of 0.83 is somewhat weak and could be cause for future problems.
- XEC, with its decline in revenue, slightly underperformed the industry average of 38.5%. Since the same quarter one year prior, revenues fell by 39.8%. Weakness in the company's revenue seems to have hurt the bottom line, decreasing earnings per share.
- The share price of CIMAREX ENERGY CO has not done very well: it is down 13.38% and has underperformed the S&P 500, in part reflecting the company's sharply declining earnings per share when compared to the year-earlier quarter. The fact that the stock is now selling for less than others in its industry in relation to its current earnings is not reason enough to justify a buy rating at this time.
- 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, CIMAREX ENERGY CO's return on equity significantly trails that of both the industry average and the S&P 500.
- Net operating cash flow has significantly decreased to $113.17 million or 67.48% 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.
- You can view the full analysis from the report here: XEC Ratings Report