Based in Oklahoma City, Continental Resources is an independent crude oil and natural gas exploration and production company.
The Organization of Petroleum Exporting Countries's refusal to cut production and data indicating that Japan's oil sales hit a 46-year low are weighing on oil prices today.
However, the sharp downturn in prices might be exaggerated as traders are out on vacation or reducing their market exposure before year end, the Wall Street Journal reports.
Crude oil (WTI) is decreasing 3.49% to $36.77 per barrel, and Brent crude is sliding 3.19% to $36.68 per barrel, according to the CNBC.com index.
Separately, recently, TheStreet Ratings objectively rated this stock according to its "risk-adjusted" total return prospect over a 12-month investment horizon. Not based on the news in any given day, the rating may differ from Jim Cramer's view or that of this articles's author. TheStreet Ratings has this to say about the recommendation:
We rate CONTINENTAL RESOURCES INC as a Hold with a ratings score of C-. 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. Among the primary strengths of the company is its expanding profit margins over time. At the same time, however, we also find weaknesses including deteriorating net income, generally higher debt management risk and disappointing return on equity.
Highlights from the analysis by TheStreet Ratings Team goes as follows:
- Along with the very weak revenue results, CLR underperformed when compared to the industry average of 36.8%. Since the same quarter one year prior, revenues plummeted by 58.5%. Weakness in the company's revenue seems to have hurt the bottom line, decreasing earnings per share.
- The gross profit margin for CONTINENTAL RESOURCES INC is currently very high, coming in at 74.79%. Despite the high profit margin, it has decreased significantly from the same period last year. Despite the mixed results of the gross profit margin, CLR's net profit margin of -12.07% significantly underperformed when compared to the industry average.
- CONTINENTAL RESOURCES 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, CONTINENTAL RESOURCES INC increased its bottom line by earning $2.64 versus $2.07 in the prior year. For the next year, the market is expecting a contraction of 108.0% in earnings (-$0.21 versus $2.64).
- The debt-to-equity ratio of 1.48 is relatively high when compared with the industry average, suggesting a need for better debt level management. To add to this, CLR has a quick ratio of 0.70, 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 on the basis of return on equity, CONTINENTAL RESOURCES INC underperformed against that of the industry average and is significantly less than that of the S&P 500.
- You can view the full analysis from the report here: CLR