NEW YORK (TheStreet) -- Valuations for stocks in the Russell 2000 Index are among the most expensive they've been in 20 years and that makes Goldman Sachs (GS - Get Report) analysts nervous.

"While the recent correction (10% since the peak in June) has driven the (Russell 2000) P/E 3x lower, the measure has only returned to levels seen just a year ago and is still in the 82nd percentile vs. the last 20 years," Goldman Sachs analysts wrote in a note to clients on Tuesday. "Importantly, the aggregate metric continues to be biased upward by negative earners, which make up a larger part of the index than at any time outside of a recession. This continues to make us nervous about the direction of the overall index, and particularly for companies that are unlikely to generate positive earnings in any of the next three years."

"The recent pullback has created a more interesting entry point for a number of stocks, and particularly for many of those where our analysts expect strong growth over the next few years," the analysts noted.

That said, "We caution against stocks for which our analysts forecast negative to minimal earnings in each of the next three years and see fundamental downside," Goldman analysts said.

The list of stocks comprise companies that Goldman analysts have rated "sell" that also have forward price-to-earnings ratios above 40 from 2015-to-2017 or that have "not meaningful," price-to-earnings ratios. Goldman defines not meaningful price-to-earnings ratios as those that have negative EBITDA, or earnings before interest, taxes, depreciation and amortization. Goldman defines small-caps as stocks with market capitalization under $4 billion.

The stocks are paired with ratings from TheStreet Ratings for added perspective. The companies are listed from least to most downside to Goldman's price target on the stock.

TheStreet Ratings uses a quantitative approach to rating over 4,300 stocks to predict return potential for the next year. The model is both objective, using elements such as volatility of past operating revenues, financial strength, and company cash flows, and subjective, including expected equities market returns, future interest rates, implied industry outlook and forecasted company earnings.

Buying an S&P 500 stock that TheStreet Ratings rated a "buy" yielded a 16.56% return in 2014 beating the S&P 500 Total Return Index by 304 basis points. Buying a Russell 2000 stock that TheStreet Ratings rated a "buy" yielded a 9.5% return in 2014, beating the Russell 2000 index, including dividends reinvested, by 460 basis points last year.

BBG Chart BBG data by YCharts

19. Bill Barrett Corp. (BBG)
Industry: Energy/Oil & Gas Exploration & Production
Market Cap: $234 million
Year-to-date return: -60%

Expected 2016 Net Debt/EBITDA (earnings before interest, taxes, depreciation and amortization): 5.3x
Goldman Sachs Rating/Price Target: Sell/$4.50
Downside to Goldman Sachs' Price Target: -10%

TheStreet Said: TheStreet Ratings team rates BILL BARRETT CORP as a Sell with a ratings score of D. TheStreet Ratings Team has this to say about their recommendation:

We rate BILL BARRETT CORP (BBG) 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 unimpressive growth in net income, weak operating cash flow, generally disappointing historical performance in the stock itself and feeble growth in its earnings per share.

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

  • The company, on the basis of change in net income from the same quarter one year ago, has significantly underperformed against the S&P 500 and did not exceed that of the Oil, Gas & Consumable Fuels industry. The net income has significantly decreased by 67.7% when compared to the same quarter one year ago, falling from -$26.59 million to -$44.58 million.
  • Net operating cash flow has decreased to $37.32 million or 28.54% when compared to the same quarter last year. In conjunction, when comparing current results to the industry average, BILL BARRETT CORP has marginally lower results.
  • Despite any intermediate fluctuations, we have only bad news to report on this stock's performance over the last year: it has tumbled by 71.06%, worse than the S&P 500's performance. Consistent with the plunge in the stock price, the company's earnings per share are down 67.27% 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.
  • BILL BARRETT 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. This company has reported somewhat volatile earnings recently. We feel it is likely to report a decline in earnings in the coming year. During the past fiscal year, BILL BARRETT CORP turned its bottom line around by earning $0.30 versus -$4.06 in the prior year. For the next year, the market is expecting a contraction of 231.7% in earnings (-$0.40 versus $0.30).
  • 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, BILL BARRETT CORP's return on equity significantly trails that of both the industry average and the S&P 500.
  • You can view the full analysis from the report here: BBG

 

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18. Shake Shack Inc. (SHAK - Get Report)
Industry: Consumer Goods & Services/Restaurants
Market Cap: $1.5 billion
Year-to-date return (since its IPO on Jan. 30, 2015): -9.1%

Expected 2016 Net Debt/EBITDA (earnings before interest, taxes, depreciation and amortization): -1.8x
Goldman Sachs Rating/Price Target: Sell/$39
Downside to Goldman Sachs' Price Target: -11%

TheStreet Said: no rating available

 

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17. Kinross Gold Corp. (KGC - Get Report)
Industry: Materials/Gold
Market Cap: $2.4 billion
Year-to-date return: -19.5%

Expected 2016 Net Debt/EBITDA (earnings before interest, taxes, depreciation and amortization): 1.1x
Goldman Sachs Rating/Price Target: Sell/$2.30
Downside to Goldman Sachs' Price Target: -20%

TheStreet Said: TheStreet Ratings team rates KINROSS GOLD CORP as a Sell with a ratings score of D. TheStreet Ratings Team has this to say about their recommendation:

We rate KINROSS GOLD CORP (KGC) a SELL. This is driven by a few notable 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 deteriorating net income, disappointing return on equity, poor profit margins and generally disappointing historical performance in the stock itself.

Highlights from the analysis by TheStreet Ratings Team goes 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 Metals & Mining industry. The net income has significantly decreased by 288.7% when compared to the same quarter one year ago, falling from $44.10 million to -$83.20 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 Metals & Mining industry and the overall market, KINROSS GOLD CORP's return on equity significantly trails that of both the industry average and the S&P 500.
  • The gross profit margin for KINROSS GOLD CORP is currently lower than what is desirable, coming in at 29.56%. It has decreased significantly from the same period last year.
  • Despite any intermediate fluctuations, we have only bad news to report on this stock's performance over the last year: it has tumbled by 34.06%, worse than the S&P 500's performance. Consistent with the plunge in the stock price, the company's earnings per share are down 275.00% 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.
  • Despite the weak revenue results, KGC has outperformed against the industry average of 46.8%. Since the same quarter one year prior, revenues fell by 17.2%. Weakness in the company's revenue seems to have hurt the bottom line, decreasing earnings per share.
  • You can view the full analysis from the report here: KGC

 

 

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16. Gulfport Energy Corp. (GPOR - Get Report)
Industry: Energy/Oil & Gas Exploration & Production
Market Cap: $3.7 billion
Year-to-date return: -15%

Expected 2016 Net Debt/EBITDA (earnings before interest, taxes, depreciation and amortization): 2.5x
Goldman Sachs Rating/Price Target: Sell/$28
Downside to Goldman Sachs' Price Target: -20%

TheStreet Said: TheStreet Ratings team rates GULFPORT ENERGY CORP as a Hold with a ratings score of C. TheStreet Ratings Team has this to say about their recommendation:

We rate GULFPORT ENERGY CORP (GPOR) 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 largely solid financial position with reasonable debt levels by most measures and expanding profit margins. However, as a counter to these strengths, we also find weaknesses including a generally disappointing performance in the stock itself, deteriorating net income and disappointing return on equity.

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

  • GPOR's debt-to-equity ratio is very low at 0.30 and is currently below that of the industry average, implying that there has been very successful management of debt levels. To add to this, GPOR has a quick ratio of 1.97, which demonstrates the ability of the company to cover short-term liquidity needs.
  • Despite the weak revenue results, GPOR has significantly outperformed against the industry average of 34.5%. Since the same quarter one year prior, revenues slightly dropped by 1.9%. Weakness in the company's revenue seems to have hurt the bottom line, decreasing earnings per share.
  • The gross profit margin for GULFPORT ENERGY CORP is rather high; currently it is at 52.76%. Despite the high profit margin, it has decreased significantly from the same period last year. Despite the mixed results of the gross profit margin, GPOR's net profit margin of -27.89% significantly underperformed when compared to the industry average.
  • 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 165.5% when compared to the same quarter one year ago, falling from $47.85 million to -$31.33 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 30.46%, worse than the S&P 500's performance. Consistent with the plunge in the stock price, the company's earnings per share are down 157.14% compared to the year-earlier quarter. Although its share price is down sharply from a year ago, do not assume that it can now be tagged as cheap and attractive. The reality is that, based on its current price in relation to its earnings, GPOR is still more expensive than most of the other companies in its industry.
  • You can view the full analysis from the report here: GPOR

 

RATE Chart RATE data by YCharts

15. Bankrate Inc. (RATE)
Industry: Technology/Internet Software & Services
Market Cap: $1.2 billion
Year-to-date return: -8.5%

Expected 2016 Net Debt/EBITDA (earnings before interest, taxes, depreciation and amortization): 0.3x
Goldman Sachs Rating/Price Target: Sell/$9
Downside to Goldman Sachs' Price Target: -21%

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

We rate BANKRATE INC (RATE) 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, revenue growth and good cash flow from operations. However, as a counter to these strengths, we find that the company's return on equity has been disappointing.

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

  • BANKRATE INC reported significant earnings per share improvement in the most recent quarter compared to the same quarter a year ago. The company has demonstrated a pattern of positive earnings per share growth over the past year. We feel that this trend should continue. This trend suggests that the performance of the business is improving. During the past fiscal year, BANKRATE INC turned its bottom line around by earning $0.05 versus -$0.10 in the prior year. This year, the market expects an improvement in earnings ($0.67 versus $0.05).
  • The net income growth from the same quarter one year ago has significantly exceeded that of the S&P 500 and the Internet Software & Services industry. The net income increased by 114.6% when compared to the same quarter one year prior, rising from -$2.19 million to $0.32 million.
  • Despite currently having a low debt-to-equity ratio of 0.36, it is higher than that of the industry average, inferring that management of debt levels may need to be evaluated further. Even though the debt-to-equity ratio shows mixed results, the company's quick ratio of 3.02 is very high and demonstrates very strong liquidity.
  • 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 Internet Software & Services industry and the overall market, BANKRATE INC's return on equity significantly trails that of both the industry average and the S&P 500.
  • After a year of stock price fluctuations, the net result is that RATE's price has not changed very much. Although its weak earnings growth may have played a role in this flat result, don't lose sight of the fact that the performance of the overall market, as measured by the S&P 500 Index, was essentially similar. We feel that the combination of its price rise over the last year and its current price-to-earnings ratio relative to its industry tend to reduce its upside potential.
  • You can view the full analysis from the report here: RATE


WPRT Chart WPRT data by YCharts

14. Westport Innovations Inc. (WPRT - Get Report)
Industry: Industrials/Construction & Farm Machinery & Heavy Trucks
Market Cap: $241 million 
Year-to-date return: -44%

Expected 2016 Net Debt/EBITDA (earnings before interest, taxes, depreciation and amortization): n/a
Goldman Sachs Rating/Price Target: Sell/$3
Downside to Goldman Sachs' Price Target: -23%

TheStreet Said: TheStreet Ratings team rates WESTPORT INNOVATIONS INC as a Sell with a ratings score of D-. TheStreet Ratings Team has this to say about their recommendation:

We rate WESTPORT INNOVATIONS INC (WPRT) a SELL. This is driven by several 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 disappointing return on equity, poor profit margins and generally disappointing historical performance in the stock itself.

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

  • 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 Machinery industry and the overall market, WESTPORT INNOVATIONS INC's return on equity significantly trails that of both the industry average and the S&P 500.
  • The gross profit margin for WESTPORT INNOVATIONS INC is currently lower than what is desirable, coming in at 34.97%. It has decreased from the same quarter the previous year. Along with this, the net profit margin of -73.57% is significantly below that of the industry average.
  • WPRT'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 48.89%, 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.
  • WPRT, with its decline in revenue, underperformed when compared the industry average of 14.4%. Since the same quarter one year prior, revenues fell by 26.4%. The declining revenue has not hurt the company's bottom line, with increasing earnings per share.
  • The current debt-to-equity ratio, 0.56, is low and is below the industry average, implying that there has been successful management of debt levels. Along with the favorable debt-to-equity ratio, the company maintains an adequate quick ratio of 1.33, which illustrates the ability to avoid short-term cash problems.
  • You can view the full analysis from the report here: WPRT

 

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13. J.C. Penney & Co. (JCP - Get Report)
Industry: Consumer Goods & Services/Department Stores
Market Cap: $3 billion
Year-to-date return: 45.5%

Expected 2016 Net Debt/EBITDA (earnings before interest, taxes, depreciation and amortization): 5.9x
Goldman Sachs Rating/Price Target: Sell/$7
Downside to Goldman Sachs' Price Target: -28%

TheStreet Said: TheStreet Ratings team rates PENNEY (J C) CO as a Sell with a ratings score of D. TheStreet Ratings Team has this to say about their recommendation:

We rate PENNEY (J C) CO (JCP) 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 generally high debt management risk and weak operating cash flow.

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

  • The debt-to-equity ratio is very high at 3.19 and currently higher than the industry average, implying increased risk associated with the management of debt levels within the company. Along with this, the company manages to maintain a quick ratio of 0.41, which clearly demonstrates the inability to cover short-term cash needs.
  • Net operating cash flow has significantly decreased to $42.00 million or 69.34% when compared to the same quarter last year. In addition, when comparing to the industry average, the firm's growth rate is much lower.
  • 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 Multiline Retail industry and the overall market, PENNEY (J C) CO's return on equity significantly trails that of both the industry average and the S&P 500.
  • The company, on the basis of net income growth from the same quarter one year ago, has significantly underperformed compared to the Multiline Retail industry average, but is greater than that of the S&P 500. The net income increased by 19.8% when compared to the same quarter one year prior, going from -$172.00 million to -$138.00 million.
  • 37.04% is the gross profit margin for PENNEY (J C) CO which we consider to be strong. It has increased from the same quarter the previous year. Regardless of the strong results of the gross profit margin, the net profit margin of -4.80% trails the industry average.
  • You can view the full analysis from the report here: JCP

 

PAAS Chart PAAS data by YCharts

12. Pan American Silver Corp. (PAAS - Get Report)
Industry: Materials/Precious Metals
Market Cap: $1.1 billion
Year-to-date return: -9.4%

Expected 2016 Net Debt/EBITDA (earnings before interest, taxes, depreciation and amortization): -0.2x
Goldman Sachs Rating/Price Target: Sell/$7
Downside to Goldman Sachs' Price Target: -31%

TheStreet Said: TheStreet Ratings team rates PAN AMERICAN SILVER CORP as a Sell with a ratings score of D. TheStreet Ratings Team has this to say about their recommendation:

We rate PAN AMERICAN SILVER CORP (PAAS) a SELL. This is driven by a number of negative factors, 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 disappointing return on equity, poor profit margins, weak operating cash flow, generally disappointing historical performance in the stock itself and feeble growth in its earnings per share.

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

  • 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 Metals & Mining industry and the overall market, PAN AMERICAN SILVER CORP's return on equity significantly trails that of both the industry average and the S&P 500.
  • The gross profit margin for PAN AMERICAN SILVER CORP is rather low; currently it is at 20.52%. It has decreased from the same quarter the previous year.
  • Net operating cash flow has significantly decreased to $20.48 million or 57.98% when compared to the same quarter last year. In addition, when comparing to the industry average, the firm's growth rate is much lower.
  • Looking at the price performance of PAAS's shares over the past 12 months, there is not much good news to report: the stock is down 30.56%, and it has underformed the S&P 500 Index. In addition, the company's earnings per share are lower today than 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.
  • PAN AMERICAN SILVER CORP's earnings per share declined by 25.0% in the most recent quarter compared to the same quarter a year ago. The company has reported a trend of declining earnings per share over the past year. However, the consensus estimate suggests that this trend should reverse in the coming year. During the past fiscal year, PAN AMERICAN SILVER CORP reported poor results of -$3.62 versus -$2.98 in the prior year. This year, the market expects an improvement in earnings (-$0.40 versus -$3.62).
  • You can view the full analysis from the report here: PAAS

 

MNKD Chart MNKD data by YCharts

11. MannKind Corp. (MNKD - Get Report)
Industry: Materials/Precious Metals
Market Cap: $1.2 billion
Year-to-date return: -44%

Expected 2016 Net Debt/EBITDA (earnings before interest, taxes, depreciation and amortization): n/a
Goldman Sachs Rating/Price Target: Sell/$2
Downside to Goldman Sachs' Price Target: -34%

TheStreet Said: no rating available

 

IPI Chart IPI data by YCharts

10. Intrepid Potash Inc. (IPI - Get Report)
Industry: Materials/Fertilizers & Agricultural Chemicals
Market Cap: $471 million
Year-to-date return: -53.5%

Expected 2016 Net Debt/EBITDA (earnings before interest, taxes, depreciation and amortization): 3.2x
Goldman Sachs Rating/Price Target: Sell/$4.50
Downside to Goldman Sachs' Price Target: -35%

TheStreet Said: TheStreet Ratings team rates INTREPID POTASH INC as a Sell with a ratings score of D+. TheStreet Ratings Team has this to say about their recommendation:

We rate INTREPID POTASH INC (IPI) a SELL. This is driven by a few notable 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 generally disappointing historical performance in the stock itself, feeble growth in its earnings per share, unimpressive growth in net income, poor profit margins and weak operating cash flow.

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

  • Despite any intermediate fluctuations, we have only bad news to report on this stock's performance over the last year: it has tumbled by 52.61%, worse than the S&P 500's performance. Consistent with the plunge in the stock price, the company's earnings per share are down 200.00% compared to the year-earlier quarter. Although its share price is down sharply from a year ago, do not assume that it can now be tagged as cheap and attractive. The reality is that, based on its current price in relation to its earnings, IPI is still more expensive than most of the other companies in its industry.
  • INTREPID POTASH 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. Earnings per share have declined over the last two years. We anticipate that this should continue in the coming year. During the past fiscal year, INTREPID POTASH INC reported lower earnings of $0.13 versus $0.30 in the prior year. For the next year, the market is expecting a contraction of 157.7% in earnings (-$0.08 versus $0.13).
  • 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 Chemicals industry. The net income has significantly decreased by 188.8% when compared to the same quarter one year ago, falling from $5.56 million to -$4.94 million.
  • The gross profit margin for INTREPID POTASH INC is currently lower than what is desirable, coming in at 29.30%. It has decreased from the same quarter the previous year. Along with this, the net profit margin of -6.70% is significantly below that of the industry average.
  • Net operating cash flow has decreased to $22.52 million or 41.54% 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: IPI

WIN Chart WIN data by YCharts

9. Windstream Holdings (WIN)
Industry: Telecom
Market Cap: $698 million
Return from April 27, 2015 (stock split): -40%

Expected 2016 Net Debt/EBITDA (earnings before interest, taxes, depreciation and amortization): 3.0x
Goldman Sachs Rating/Price Target: Sell/$4.25
Downside to Goldman Sachs' Price Target: -36%

TheStreet Said: no rating available 

SGMS Chart SGMS data by YCharts

8. Scientific Games Corp. (SGMS - Get Report)
Industry: Consumer Goods & Services/Casinos & Gaming
Market Cap: $932 million
Year-to-date return: -12.1%

Expected 2016 Net Debt/EBITDA (earnings before interest, taxes, depreciation and amortization): 7.8x
Goldman Sachs Rating/Price Target: Sell/$7.50
Downside to Goldman Sachs' Price Target: -36%

TheStreet Said: TheStreet Ratings team rates SCIENTIFIC GAMES CORP as a Sell with a ratings score of D+. TheStreet Ratings Team has this to say about their recommendation:

We rate SCIENTIFIC GAMES CORP (SGMS) a SELL. This is driven by several 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 and deteriorating net income.

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

  • SCIENTIFIC GAMES CORP's earnings per share declined by 38.4% in the most recent quarter compared to the same quarter a year ago. Earnings per share have declined over the last two years. We anticipate that this should continue in the coming year. During the past fiscal year, SCIENTIFIC GAMES CORP reported poor results of -$2.76 versus -$0.31 in the prior year. For the next year, the market is expecting a contraction of 37.3% in earnings (-$3.79 versus -$2.76).
  • 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 Hotels, Restaurants & Leisure industry. The net income has significantly decreased by 41.2% when compared to the same quarter one year ago, falling from -$72.40 million to -$102.20 million.
  • Looking at where the stock is today compared to one year ago, we find that it is higher, and it has outperformed the rise in the S&P 500 over the same period, despite the company's weak earnings results. Turning our attention to the future direction of the stock, we do not believe this stock offers ample reward opportunity to compensate for the risks, despite the fact that it rose over the past year.
  • The gross profit margin for SCIENTIFIC GAMES CORP is rather high; currently it is at 61.24%. It has increased from the same quarter the previous year. Regardless of the strong results of the gross profit margin, the net profit margin of -14.77% is in-line with the industry average.
  • Net operating cash flow has significantly increased by 53.78% to $36.60 million when compared to the same quarter last year. In addition, SCIENTIFIC GAMES CORP has also vastly surpassed the industry average cash flow growth rate of -4.80%.
  • You can view the full analysis from the report here: SGMS

BTU Chart BTU data by YCharts

7. Peabody Energy Corp. (BTU - Get Report)
Industry: Energy/Coal & Consumable Fuels
Market Cap: $400 million
Return since Oct. 1 (stock split): 22%

Expected 2016 Net Debt/EBITDA (earnings before interest, taxes, depreciation and amortization): 10x
Goldman Sachs Rating/Price Target: Sell/$15
Downside to Goldman Sachs' Price Target: -39%

TheStreet Said: TheStreet Ratings team rates PEABODY ENERGY CORP as a Sell with a ratings score of D. TheStreet Ratings Team has this to say about their recommendation:

We rate PEABODY ENERGY CORP (BTU) a SELL. This is driven by some concerns, 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 deteriorating net income, generally high debt management risk, 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:

  • 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 1326.1% when compared to the same quarter one year ago, falling from -$73.30 million to -$1,045.30 million.
  • The debt-to-equity ratio is very high at 3.81 and currently higher than the industry average, implying increased risk associated with the management of debt levels within the company. To add to this, BTU has a quick ratio of 0.53, this demonstrates the lack of ability of the company to cover short-term liquidity needs.
  • 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, PEABODY ENERGY CORP'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 -$59.80 million or 382.07% when compared to the same quarter last year. In addition, when comparing to the industry average, the firm's growth rate is much lower.
  • Despite any intermediate fluctuations, we have only bad news to report on this stock's performance over the last year: it has tumbled by 85.82%, worse than the S&P 500's performance. Consistent with the plunge in the stock price, the company's earnings per share are down 1225.00% 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: BTU

 

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6. Cloud Peak Energy Inc. (CLD - Get Report)
Industry: Energy/Coal & Consumable Fuels
Market Cap: $183 million
Year-to-date return: -67.3%

Expected 2016 Net Debt/EBITDA (earnings before interest, taxes, depreciation and amortization): 7.4x
Goldman Sachs Rating/Price Target: Sell/$2
Downside to Goldman Sachs' Price Target: -40%

TheStreet Said: TheStreet Ratings team rates CLOUD PEAK ENERGY INC as a Sell with a ratings score of D. TheStreet Ratings Team has this to say about their recommendation:

We rate CLOUD PEAK ENERGY INC (CLD) a SELL. This is driven by some concerns, 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 unimpressive growth in net income, poor profit margins, weak operating cash flow, generally disappointing historical performance in the stock itself and feeble growth in its earnings per share.

Highlights from the analysis by TheStreet Ratings Team goes 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 2362.6% when compared to the same quarter one year ago, falling from -$2.15 million to -$52.90 million.
  • The gross profit margin for CLOUD PEAK ENERGY INC is currently extremely low, coming in at 8.89%. It has decreased from the same quarter the previous year. Along with this, the net profit margin of -21.66% is significantly below that of the industry average.
  • Net operating cash flow has significantly decreased to -$17.05 million or 175.55% when compared to the same quarter last year. In addition, when comparing to the industry average, the firm's growth rate is much lower.
  • Despite any intermediate fluctuations, we have only bad news to report on this stock's performance over the last year: it has tumbled by 69.99%, worse than the S&P 500's performance. Consistent with the plunge in the stock price, the company's earnings per share are down 2075.00% compared to the year-earlier quarter. Turning toward the future, the fact that the stock has come down in price over the past year should not necessarily be interpreted as a negative; it could be one of the factors that may help make the stock attractive down the road. Right now, however, we believe that it is too soon to buy.
  • CLOUD PEAK ENERGY 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. This company has reported somewhat volatile earnings recently. We feel it is likely to report a decline in earnings in the coming year. During the past fiscal year, CLOUD PEAK ENERGY INC increased its bottom line by earning $1.28 versus $0.85 in the prior year. For the next year, the market is expecting a contraction of 146.1% in earnings (-$0.59 versus $1.28).
  • You can view the full analysis from the report here: CLD

 

SD Chart SD data by YCharts

5. SandRidge Energy Inc. (SD - Get Report)
Industry: Energy/Coal & Consumable Fuels
Market Cap: $227 million
Year-to-date return: -77%

Expected 2016 Net Debt/EBITDA (earnings before interest, taxes, depreciation and amortization): 9.8x
Goldman Sachs Rating/Price Target: Sell/25 cents
Downside to Goldman Sachs' Price Target: -47%

TheStreet Said: TheStreet Ratings team rates SANDRIDGE ENERGY INC as a Sell with a ratings score of D. TheStreet Ratings Team has this to say about their recommendation:

We rate SANDRIDGE ENERGY INC (SD) a SELL. This is driven by a number of negative factors, 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 deteriorating net income, generally disappointing historical performance in the stock itself and feeble growth in its earnings per share.

Highlights from the analysis by TheStreet Ratings Team goes 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 4060.3% when compared to the same quarter one year ago, falling from -$32.89 million to -$1,368.48 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 87.72%, worse than the S&P 500's performance. Consistent with the plunge in the stock price, the company's earnings per share are down 2680.00% 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.
  • SANDRIDGE ENERGY 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. This company has reported somewhat volatile earnings recently. We feel it is likely to report a decline in earnings in the coming year. During the past fiscal year, SANDRIDGE ENERGY INC turned its bottom line around by earning $0.34 versus -$1.28 in the prior year. For the next year, the market is expecting a contraction of 176.5% in earnings (-$0.26 versus $0.34).
  • SD, with its decline in revenue, slightly underperformed the industry average of 34.5%. Since the same quarter one year prior, revenues fell by 38.7%. Weakness in the company's revenue seems to have hurt the bottom line, decreasing earnings per share.
  • Net operating cash flow has significantly increased by 63.10% to $228.90 million when compared to the same quarter last year. In addition, SANDRIDGE ENERGY INC has also vastly surpassed the industry average cash flow growth rate of -19.64%.
  • You can view the full analysis from the report here: SD

 

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4. California Resources Corp. (CRC - Get Report)
Industry: Energy/Oil & Natural Gas Producer
Market Cap: $1.6 billion
Year-to-date return: -28.7%

Expected 2016 Net Debt/EBITDA (earnings before interest, taxes, depreciation and amortization): 8.5x
Goldman Sachs Rating/Price Target: Sell/$2.50
Downside to Goldman Sachs' Price Target: -47%

TheStreet Said: no rating available

IAG Chart IAG data by YCharts

3. Iamgold Corp. (IAG - Get Report)
Industry: Materials/Gold
Market Cap: $734 million
Year-to-date return: -23%

Expected 2016 Net Debt/EBITDA (earnings before interest, taxes, depreciation and amortization): 0.1x
Goldman Sachs Rating/Price Target: Sell/$1.30
Downside to Goldman Sachs' Price Target: -47%

TheStreet Said: TheStreet Ratings team rates IAMGOLD CORP as a Sell with a ratings score of D. TheStreet Ratings Team has this to say about their recommendation:

We rate IAMGOLD CORP (IAG) a SELL. This is driven by a number of negative factors, 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 poor profit margins, weak operating cash flow and generally disappointing historical performance in the stock itself.

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

  • The gross profit margin for IAMGOLD CORP is currently lower than what is desirable, coming in at 28.30%. It has decreased from the same quarter the previous year.
  • Net operating cash flow has significantly decreased to $31.70 million or 67.25% when compared to the same quarter last year. In addition, when comparing to the industry average, the firm's growth rate is much lower.
  • IAG'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 28.30%, 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 change in net income from the same quarter one year ago has significantly exceeded that of the Metals & Mining industry average, but is less than that of the S&P 500. The net income has decreased by 23.1% when compared to the same quarter one year ago, dropping from -$16.00 million to -$19.70 million.
  • 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 Metals & Mining industry and the overall market, IAMGOLD CORP's return on equity significantly trails that of both the industry average and the S&P 500.
  • You can view the full analysis from the report here: IAG

 

BAS Chart BAS data by YCharts

2. Basic Energy Services Inc. (BAS - Get Report)
Industry: Energy/Oil & Gas Equipment & Services
Market Cap: $182 million
Year-to-date return: -37%

Expected 2016 Net Debt/EBITDA (earnings before interest, taxes, depreciation and amortization): 19.3x
Goldman Sachs Rating/Price Target: Sell/$2.10
Downside to Goldman Sachs' Price Target: -59%

TheStreet Said: TheStreet Ratings team rates BASIC ENERGY SERVICES INC as a Sell with a ratings score of D. TheStreet Ratings Team has this to say about their recommendation:

We rate BASIC ENERGY SERVICES INC (BAS) a SELL. This is driven by some concerns, 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 deteriorating net income, disappointing return on equity, poor profit margins, weak operating cash flow and generally high debt management risk.

Highlights from the analysis by TheStreet Ratings Team goes 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 Energy Equipment & Services industry. The net income has significantly decreased by 2076.9% when compared to the same quarter one year ago, falling from $2.44 million to -$48.30 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 Energy Equipment & Services industry and the overall market, BASIC ENERGY SERVICES INC's return on equity significantly trails that of both the industry average and the S&P 500.
  • The gross profit margin for BASIC ENERGY SERVICES INC is rather low; currently it is at 20.98%. It has decreased significantly from the same period last year. Along with this, the net profit margin of -24.37% is significantly below that of the industry average.
  • Net operating cash flow has significantly decreased to $22.34 million or 65.86% when compared to the same quarter last year. In addition, when comparing to the industry average, the firm's growth rate is much lower.
  • Although BAS's debt-to-equity ratio of 3.42 is very high, it is currently less than that of the industry average. Even though the debt-to-equity ratio is weak, BAS's quick ratio is somewhat strong at 1.46, demonstrating the ability to handle short-term liquidity needs.
  • You can view the full analysis from the report here: BAS

 

CRR Chart CRR data by YCharts

1. Carbo Ceramics Inc. (CRR - Get Report)
Industry: Energy/Oil & Gas Equipment & Services
Market Cap: $516 million
Year-to-date return: -44%

Expected 2016 Net Debt/EBITDA (earnings before interest, taxes, depreciation and amortization): n/a
Goldman Sachs Rating/Price Target: Sell/$10
Downside to Goldman Sachs' Price Target: -59%

TheStreet Said: TheStreet Ratings team rates CARBO CERAMICS INC as a Sell with a ratings score of D. TheStreet Ratings Team has this to say about their recommendation:

We rate CARBO CERAMICS INC (CRR) a SELL. This is driven by several 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, poor profit margins and weak operating cash flow.

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

  • CARBO CERAMICS 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. Earnings per share have declined over the last two years. We anticipate that this should continue in the coming year. During the past fiscal year, CARBO CERAMICS INC reported lower earnings of $2.42 versus $3.68 in the prior year. For the next year, the market is expecting a contraction of 188.6% in earnings (-$2.15 versus $2.42).
  • 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 Energy Equipment & Services industry. The net income has significantly decreased by 173.9% when compared to the same quarter one year ago, falling from $23.02 million to -$17.00 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 Energy Equipment & Services industry and the overall market, CARBO CERAMICS INC's return on equity significantly trails that of both the industry average and the S&P 500.
  • The gross profit margin for CARBO CERAMICS INC is currently extremely low, coming in at 5.06%. It has decreased significantly from the same period last year. Along with this, the net profit margin of -23.21% is significantly below that of the industry average.
  • Net operating cash flow has significantly decreased to $6.34 million or 52.70% 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: CRR