3 Stocks Pushing The Energy Industry Lower

The Energy industry as a whole closed the day down 3.2% versus the S&P 500, which was down 0.9%. Laggards within the Energy industry included Tengasco ( TGC), down 2.3%, Houston American Energy ( HUSA), down 5.0%, Escalera Resources ( ESCR), down 4.7%, Pedevco ( PED), down 3.4% and SAExploration Holdings ( SAEX), down 3.4%.

TheStreet Ratings Group would like to highlight 3 stocks that pushed the industry lower today:

China Petroleum & Chemical ( SNP) is one of the companies that pushed the Energy industry lower today. China Petroleum & Chemical was down $1.64 (2.2%) to $71.55 on average volume. Throughout the day, 174,299 shares of China Petroleum & Chemical exchanged hands as compared to its average daily volume of 139,400 shares. The stock ranged in price between $70.56-$72.08 after having opened the day at $72.04 as compared to the previous trading day's close of $73.19.

China Petroleum & Chemical Corporation, an energy and chemical company, through its subsidiaries, engages in the oil and gas, and chemical operations and businesses in the People's Republic of China. China Petroleum & Chemical has a market cap of $87.7 billion and is part of the basic materials sector. Shares are down 9.7% year-to-date as of the close of trading on Tuesday. Currently there is 1 analyst who rates China Petroleum & Chemical a buy, 1 analyst rates it a sell, and none rate it a hold.

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TheStreet Ratings rates China Petroleum & Chemical as a hold. The company's strengths can be seen in multiple areas, such as its reasonable valuation levels and largely solid financial position with reasonable debt levels by most measures. However, as a counter to these strengths, we also find weaknesses including feeble growth in the company's earnings per share, deteriorating net income and disappointing return on equity.

Highlights from TheStreet Ratings analysis on SNP go as follows:

  • The current debt-to-equity ratio, 0.45, 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 0.32 is very weak and demonstrates a lack of ability to pay short-term obligations.
  • Regardless of the drop in revenue, the company managed to outperform against the industry average of 34.4%. Since the same quarter one year prior, revenues fell by 25.2%. Weakness in the company's revenue seems to have hurt the bottom line, decreasing earnings per share.
  • The gross profit margin for CHINA PETROLEUM & CHEM CORP is currently extremely low, coming in at 9.79%. It has decreased from the same quarter the previous year. Along with this, the net profit margin of 0.45% trails that of the industry average.
  • Net operating cash flow has decreased to $1,077.92 million or 46.90% 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: China Petroleum & Chemical Ratings Report

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At the close, Pedevco ( PED) was down $0.01 (3.4%) to $0.36 on average volume. Throughout the day, 56,487 shares of Pedevco exchanged hands as compared to its average daily volume of 39,600 shares. The stock ranged in price between $0.35-$0.40 after having opened the day at $0.40 as compared to the previous trading day's close of $0.37.

PEDEVCO Corp., doing business as Pacific Energy Development, engages in the acquisition, exploration, development, and production of oil and natural gas shale plays in the United States. Pedevco has a market cap of $13.3 million and is part of the basic materials sector. Shares are down 17.2% year-to-date as of the close of trading on Tuesday. Currently there are 2 analysts who rate Pedevco a buy, no analysts rate it a sell, and none rate it a hold.

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TheStreet Ratings rates Pedevco 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 PED go as follows:

  • The debt-to-equity ratio of 1.38 is relatively high when compared with the industry average, suggesting a need for better debt level management. Along with this, the company manages to maintain a quick ratio of 0.26, which clearly demonstrates the inability to cover short-term cash needs.
  • Net operating cash flow has significantly decreased to -$3.88 million or 79.31% when compared to the same quarter last year. In addition, when comparing to the industry average, the firm's growth rate is much lower.
  • PED'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 83.34%, 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, PEDEVCO CORP's return on equity significantly trails that of both the industry average and the S&P 500.
  • PEDEVCO CORP reported significant earnings per share improvement in the most recent quarter compared to the same quarter a year ago. This company has reported somewhat volatile earnings recently. But, we feel it is poised for EPS growth in the coming year. During the past fiscal year, PEDEVCO CORP reported poor results of -$1.08 versus -$0.98 in the prior year. This year, the market expects an improvement in earnings (-$0.24 versus -$1.08).

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

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Houston American Energy ( HUSA) was another company that pushed the Energy industry lower today. Houston American Energy was down $0.01 (5.0%) to $0.19 on heavy volume. Throughout the day, 78,328 shares of Houston American Energy exchanged hands as compared to its average daily volume of 48,700 shares. The stock ranged in price between $0.17-$0.19 after having opened the day at $0.18 as compared to the previous trading day's close of $0.20.

Houston American Energy Corp., an independent energy company, acquires, explores for, develops, and produces natural gas, crude oil, and condensate from properties located principally in the Gulf Coast area of the United States and South America. Houston American Energy has a market cap of $10.4 million and is part of the basic materials sector. Shares are up 24.6% year-to-date as of the close of trading on Tuesday.

TheStreet Ratings rates Houston American Energy as a sell. The company's weaknesses can be seen in multiple areas, such as its deteriorating net income, disappointing return on equity, feeble growth in its earnings per share and generally disappointing historical performance in the stock itself.

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Highlights from TheStreet Ratings analysis on HUSA 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 121.9% when compared to the same quarter one year ago, falling from -$0.54 million to -$1.19 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, HOUSTON AMERN ENERGY CORP's return on equity significantly trails that of both the industry average and the S&P 500.
  • HOUSTON AMERN ENERGY CORP 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. Stable Earnings per share over the past year indicate the company has sound management over its earnings and share float. During the past fiscal year, HOUSTON AMERN ENERGY CORP reported poor results of -$0.07 versus -$0.06 in the prior year.
  • The share price of HOUSTON AMERN ENERGY CORP has not done very well: it is down 13.05% 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.
  • Despite the weak revenue results, HUSA has significantly outperformed against the industry average of 34.4%. Since the same quarter one year prior, revenues slightly dropped by 3.8%. The declining revenue appears to have seeped down to the company's bottom line, decreasing earnings per share.

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

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