McDermott International's (MDR - Get Report) stock on Monday jumped 5.2%, to levels above $4. The boost came courtesy of a new deal the oil and gas-based construction and engineering firm signed on Friday. McDermott has been trending higher in recent sessions. Is McDermott International, which has been hard-hit like the rest of the energy sector, ready for a turnaround? Or is it still a stressed-out and toxic stock? This stock is part of a group of distressed and "Stressed Out" stocks that TheStreet will be monitoring through these choppy markets.

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Last week, McDermott announced that it had inked a deal with an as-of-yet-unnamed upstream oil and gas operator for an offshore project in the Middle East. Although McDermott did not reveal the value of the contract, the company described it as "large." The scope of the "fast-track" project includes engineering, procurement, fabrication, transportation, and installation of offshore pipelines.

According to Linh Austin, McDermott's vice president for the Middle East, the nature of the project is "ideally suited to our vertically integrated capabilities involving our engineering, project management, and procurement teams based in Dubai, as well as our marine assets in the region that addressed all the project drivers to deliver the best customer-focused solution."

On Friday, McDermott popped from $3.77 to $4.08. But the company's recent winning streak really traces back to February 11, when it began to rise from its 52-week low at $2.20 per share.

The stock's climb continued with the release of fourth-quarter earnings results. McDermott beat Wall Street's expectations. But the company posted a loss for the quarter of $18.7 million, compared with a profit in the fourth quarter of 2014. The company also announced that it had realized a loss of 8 cents per share. (Analysts had been calling for a loss of 13 cents per share.) And revenue for the period came in just at $667.4 million, versus a consensus of $767.7 million.

As with most companies in the oil and gas sector, McDermott remains a dangerous stock. The company does not have a good track record of completing projects -- a number of deals fell through even in 2013 and 2014, when energy prices were still soaring. Due to this, the company maintains a "Junk" rating from Moody's. Many analysts still consider McDermott to be among the market's worst investments, regardless of the company's recent good fortune.

"The nature of McDermott's business, which includes sizeable fixed-priced offshore and subsea oil and gas projects, lends itself to volatility in orders, project timing, revenues and profitability and encompasses high execution risk," wrote Moody's when downgrading McDermott stock from B1 to Ba3.

Earlier today the stock was backing down on any gains it made yesterday; it has since recovered and is trading up about 1.35% on the day as of this writing. 

McDermott International is a smaller company than the big oil and gas players like BP, Chesapeake Energy, Exxon Mobil, or Chevron, which have been hardest hit by the energy pricing slump. And since it provides services, rather than producing oil and gas, McDermott is slightly safer. However, it's by no means impervious to the ups and downs of the market. Despite recent increases in the price of oil, it will take a long time before the industry stabilizes. Until then, McDermott will be a stock to steer clear of.

For more articles on distressed stocks to avoid, read Real Money's "Stressed Out" stocks coverage. You can find more information on the index here.

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This article is commentary by an independent contributor. At the time of publication, the author held no positions in the stocks mentioned.