NEW YORK (TheStreet) -- Cabot Oil & Gas Corp. (COG) stock is falling by 0.17% to $17.66 in afternoon trading on Monday, as oil prices decreased on concerns over the global economy following soft Chinese manufacturing data.
WTI crude is down by 0.65% to $36.80 per barrel, while Brent crude is declining by 0.35% to $37.15 per barrel, according to the CNBC.com index.
Weak economic data from China caused markets in the country to plunge 7%, triggering a sell-off in equity markets across the world, Reuters reports.
Oil prices are also being pressured by data that showed an increase of more than 480,000 barrels in the Cushing, OK delivery hub, according to Genscape, Reuters added.
Prices of crude oil had gained more than 4% earlier today due to the rising tensions in the Middle East.
"The Saudi-Iran standoff is certainly one to worry over given its ramifications for oil supply," Price Futures Group analyst Phil Flynn told Reuters. "But the equity markets selloff is more pressing and difficult to ignore because of the impact of China on the global economy and overall demand for oil."
Houston-based Cabot Oil & Gas is an oil and gas exploration and production company that operates in the U.S.
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 CABOT OIL & GAS CORP as a Sell with a ratings score of D+. 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 high debt management risk.
Highlights from the analysis by TheStreet Ratings Team goes as follows:
- CABOT OIL & GAS 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. 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, CABOT OIL & GAS CORP reported lower earnings of $0.24 versus $0.67 in the prior year. For the next year, the market is expecting a contraction of 41.7% in earnings ($0.14 versus $0.24).
- 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 115.4% when compared to the same quarter one year ago, falling from $100.79 million to -$15.51 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, CABOT OIL & GAS 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 $146.36 million or 59.15% 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 42.87%, worse than the S&P 500's performance. Consistent with the plunge in the stock price, the company's earnings per share are down 116.66% 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: COG