NEW YORK (TheStreet) -- Shares of Chesapeake Energy Corp. are down by 1.25% to $20.49 in early afternoon trading on Thursday, as the natural gas and oil exploration and production company and other stocks within its sector takes a hit due to the falling price of oil. Crude oil (WTI) is slipping by 1.09% to $51.57 per barrel and Brent crude is down by 0.20% to $60.41 per barrel this afternoon, according to the Bloomberg index. Oil prices are slumping today as concerns regarding the global oversupply mount, in addition to the possibility that Saudi Arabia is going to increase its production output. Exclusive Report: Jim Cramer's Best Stocks for 2015 Data from the Energy Information Administration showed that U.S. crude inventories rose by 7.7 million barrels last week, a smaller gain than was previously announced. Earlier in the day the American Petroleum Institute said that U.S. crude supplies increased by 14.3 million barrels last week. Analysts were expecting a rise of 3.2 million barrels. Saudi Arabia, the world's largest oil exporter, may increase is production rate to close to 10 million barrels per day as the country holds to its strategy of protecting market share instead of lowering production in order to see prices increase, Reuters reports. Separately, TheStreet Ratings team rates CHESAPEAKE ENERGY CORP as a Hold with a ratings score of C+. TheStreet Ratings Team has this to say about their recommendation: "We rate CHESAPEAKE ENERGY CORP (CHK) a HOLD. 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. The company's strengths can be seen in multiple areas, such as its robust revenue growth, growth in earnings per share and increase in net income. However, as a counter to these strengths, we also find weaknesses including a generally disappointing performance in the stock itself, weak operating cash flow and poor profit margins." Highlights from the analysis by TheStreet Ratings Team goes as follows: The revenue growth greatly exceeded the industry average of 20.6%. Since the same quarter one year prior, revenues rose by 17.2%. This growth in revenue appears to have trickled down to the company's bottom line, improving the earnings per share. CHESAPEAKE ENERGY CORP has improved earnings per share by 8.3% in the most recent quarter compared to the same quarter a year ago. The company has demonstrated a pattern of positive earnings per share growth over the past year. We feel that this trend should continue. This trend suggests that the performance of the business is improving. During the past fiscal year, CHESAPEAKE ENERGY CORP turned its bottom line around by earning $0.68 versus -$1.62 in the prior year. This year, the market expects an improvement in earnings ($1.56 versus $0.68). The debt-to-equity ratio is somewhat low, currently at 0.71, and is less than that of the industry average, implying that there has been a relatively successful effort in the management of debt levels. Even though the company has a strong debt-to-equity ratio, the quick ratio of 0.46 is very weak and demonstrates a lack of ability to pay short-term obligations. Net operating cash flow has decreased to $1,162.00 million or 14.30% when compared to the same quarter last year. Despite a decrease in cash flow of 14.30%, CHESAPEAKE ENERGY CORP is in line with the industry average cash flow growth rate of -16.12%. CHK has underperformed the S&P 500 Index, declining 12.44% from its price level of one year ago. 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. You can view the full analysis from the report here: CHK Ratings Report
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