Oil prices fell past $40 per barrel after the EIA reported a 1.2 million barrel increase in crude oil inventories last week, compared to analysts' expectations for a decline of 300,000 barrels, the Wall Street Journal reports.
"If you have favorable weather, that means people are driving, so demand will be up, you've got imports, and a perfect scenario for refiners to pump out as much as they can," Mark Waggoner, president of Excel Futures, told the Journal.
Crude oil (WTI) is down 3.82% to $40.25 per barrel and Brent oil is declining 3.78% to $42.76 in late afternoon trading, according to the CNBC.com index.
Based in Calgary, Canada, Precision Drilling is an oilfield services company that operates in the U.S. and Canada.
Separately, TheStreet Ratings team rates PRECISION DRILLING CORP as a Sell with a ratings score of D. TheStreet Ratings Team has this to say about their recommendation:
We rate PRECISION DRILLING CORP (PDS) 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 feeble growth in its earnings per share, deteriorating net income, 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:
- PRECISION DRILLING 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. The company has reported a trend of declining earnings per share over the past two years. During the past fiscal year, PRECISION DRILLING CORP reported lower earnings of $0.12 versus $0.67 in the prior year.
- 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 264.2% when compared to the same quarter one year ago, falling from $52.81 million to -$86.70 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, PRECISION DRILLING 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 $61.05 million or 58.39% 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.
- Despite any intermediate fluctuations, we have only bad news to report on this stock's performance over the last year: it has tumbled by 44.05%, worse than the S&P 500's performance. Consistent with the plunge in the stock price, the company's earnings per share are down 266.66% 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: PDS