WPX Energy (WPX) Stock Jumps on Rebounding Oil Prices

NEW YORK (TheStreet) -- Shares of WPX Energy (WPX) were gaining by 7.1% to $6.22 on Thursday morning, as oil prices rebounded from recent losses.

WTI crude oil for October delivery was up 4.22% to $40.23 a barrel on Thursday morning, and Brent crude oil for October delivery was up 4.2% to $44.95 a barrel.

Crude oil prices were rising due to a rally in equity markets and an unexpected decrease in U.S. crude oil inventories, according to Reuters. World stock markets recovered on hopes that the Chinese governments' actions to stimulate the economy will pay off.

On Wednesday the U.S. Energy Information Administration said that U.S. crude inventories decreased by 5.5 billion barrels in the week ended August 21, the largest single-week decline since June. Analysts surveyed by Reuters expected inventories to increase by 1 million barrels.

WPX Energy is a Tulsa, OK-based independent natural gas and oil exploration and production company with operations in the Williston, Piceance, and San Juan basins.

Separately, TheStreet Ratings team rates WPX ENERGY INC as a Hold with a ratings score of C-. TheStreet Ratings Team has this to say about their recommendation:

"We rate WPX ENERGY INC (WPX) 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. The company's strengths can be seen in multiple areas, such as its compelling growth in net income, 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 poor profit margins, weak operating cash flow and a generally disappointing performance in the stock itself."

Highlights from the analysis by TheStreet Ratings Team goes as follows:

  • The net income growth from the same quarter one year ago has significantly exceeded that of the S&P 500 and the Oil, Gas & Consumable Fuels industry. The net income increased by 77.8% when compared to the same quarter one year prior, rising from -$135.00 million to -$30.00 million.
  • The current debt-to-equity ratio, 0.46, 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.
  • The gross profit margin for WPX ENERGY INC is currently lower than what is desirable, coming in at 30.28%. It has decreased significantly from the same period last year. Along with this, the net profit margin of -10.56% is significantly below that of the industry average.
  • Net operating cash flow has decreased to $236.00 million or 24.84% when compared to the same quarter last year. In conjunction, when comparing current results to the industry average, WPX ENERGY INC has marginally lower results.
  • You can view the full analysis from the report here: WPX Ratings Report

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