NEW YORK (TheStreet) -- Encana Corp. (ECA - Get Report) shares are gaining 2.97% to $7.97 with climbing oil prices on news that Saudi Arabia, the world's biggest oil producer, is planning to balance the market.
Crude oil (WTI) is declining 0.43% to $41.72 per barrel and Brent crude is rising 0.43% to $44.85 per barrel, according to the CNBC.com index.
Since Saudi Arabia is the biggest mover in OPEC, its statement is having a positive impact, according to John Kildruff, partner at New York energy hedge fund Again Capital, Reuters reports.
However, others were skeptical of Saudi Arabia's price stability statement.
Based in Canada, Encana engages in the development, exploration, production, and marketing of natural gas, oil, and natural gas liquids in Canada and the U.S.
Separately, TheStreet Ratings team rates ENCANA CORP as a Sell with a ratings score of D. TheStreet Ratings Team has this to say about their recommendation:
We rate ENCANA CORP (ECA) 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, 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 144.0% when compared to the same quarter one year ago, falling from $2,807.00 million to -$1,236.00 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, ENCANA CORP's return on equity significantly trails that of both the industry average and the S&P 500.
- Net operating cash flow has decreased to $453.00 million or 34.91% when compared to the same quarter last year. In conjunction, when comparing current results to the industry average, ENCANA 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 54.78%, worse than the S&P 500's performance. Consistent with the plunge in the stock price, the company's earnings per share are down 138.78% 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.
- ENCANA 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, ENCANA CORP increased its bottom line by earning $4.59 versus $0.31 in the prior year. For the next year, the market is expecting a contraction of 103.6% in earnings (-$0.17 versus $4.59).
- You can view the full analysis from the report here: ECA