Based in Houston, Occidental Petroleum is engaged in oil and gas exploration and production.
China's stocks tumbled again today, fueling investors' concerns that the world's second-largest oil consumer will be unable to contribute to demand for the oversupplied commodity.
"The focus is still on China and the demand concerns in China moving forward into 2016," Tony Headrick, an energy market analyst at CHS Hedging, told Reuters.
Crude oil (WTI) is plummeting by 6.15% to $31.12 per barrel and Brent crude is diving by 6.86% to $31.25 per barrel this afternoon, 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 OCCIDENTAL PETROLEUM CORP as a Sell with a ratings score of D+. 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 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 316.0% when compared to the same quarter one year ago, falling from $1,208.00 million to -$2,609.00 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, OCCIDENTAL PETROLEUM 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 $1,020.00 million or 61.33% 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.
- The share price of OCCIDENTAL PETROLEUM CORP has not done very well: it is down 16.56% and has underperformed the S&P 500, in part reflecting the company's sharply declining earnings per share when compared to the year-earlier quarter. The fact that the stock is now selling for less than others in its industry in relation to its current earnings is not reason enough to justify a buy rating at this time.
- OCCIDENTAL PETROLEUM 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. However, the consensus estimate suggests that this trend should reverse in the coming year. During the past fiscal year, OCCIDENTAL PETROLEUM CORP swung to a loss, reporting -$0.27 versus $7.35 in the prior year. This year, the market expects an improvement in earnings ($0.28 versus -$0.27).
- You can view the full analysis from the report here: OXY