Denbury Resources (DNR) Stock Climbing Today as Oil Prices Soar

NEW YORK (TheStreet) -- Shares on Denbury Resources Inc. are higher by 3.09% to $7.51 in early-afternoon trading on Wednesday, as the energy sector gets a boost today from the rally in oil prices. Crude oil (WTI) is gaining by 5.84% to $50.38 per barrel and Brent crude is rising by 4.41% to $57.54 per barrel this afternoon, according to the CNBC.com index. Oil prices are in the green today after weekly U.S. stock builds data turned out to be less than what some were expecting, and as negotiators missed a deadline on Iranian nuclear talks that many feared would result in bringing more supply to the market, Reuters reports. U.S. crude inventories grew by 4.8 million barrels to 471.4 million in the week ended March 27. Analysts polled by Reuters were expecting a rise of 4.2 million barrels, others were concerned that U.S. stockpiles would increase more after the American Petroleum Institute suggested it could go up by as much as 5.2 million barrels in a report released Tuesday. On Monday Iran and six world powers began talks regarding the Middle Eastern country's nuclear program at a meeting in Switzerland. The group gave itself until the end of the day Tuesday to reach a deal, but the State Department announced yesterday afternoon that the talks would continue into Wednesday. Concerns were raised that if a nuclear deal were reached with Iran that Western sanctions on the country would be lifted and Iran would begin increasing its oil exports. "A lot of people were expecting the deal to be done overnight and Iran to be pumping a million barrels tomorrow. That's not going to be the case. Everybody's been lowering expectations and I think that's feeding into prices," Amrita Sen, chief oil analyst at Energy Aspects told Reuters. Separately, TheStreet Ratings team rates DENBURY RESOURCES INC as a Hold with a ratings score of C. TheStreet Ratings Team has this to say about their recommendation: "We rate DENBURY RESOURCES INC (DNR) 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 compelling growth in net income, reasonable valuation levels and expanding profit margins. However, as a counter to these strengths, we also find weaknesses including a generally disappointing performance in the stock itself and weak operating cash flow." Highlights from the analysis by TheStreet Ratings Team goes as follows: The net income growth from the same quarter one year ago has significantly exceeded that of the S&P 500 and the Oil, Gas & Consumable Fuels industry. The net income increased by 304.1% when compared to the same quarter one year prior, rising from $89.99 million to $363.63 million. The debt-to-equity ratio is somewhat low, currently at 0.63, and is less than that of the industry average, implying that there has been a relatively successful effort in the management of debt levels. Despite the fact that DNR's debt-to-equity ratio is low, the quick ratio, which is currently 0.57, displays a potential problem in covering short-term cash needs. Net operating cash flow has declined marginally to $337.73 million or 3.22% when compared to the same quarter last year. Despite a decrease in cash flow of 3.22%, DENBURY RESOURCES INC is in line with the industry average cash flow growth rate of -13.05%. DNR's stock share price has done very poorly compared to where it was a year ago: Despite any rallies, the net result is that it is down by 51.03%, which is also worse that the performance of the S&P 500 Index. Investors have so far failed to pay much attention to the earnings improvements the company has managed to achieve over the last 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: DNR Ratings Report Must Read: Warren Buffett's Top 25 Stocks for 2015

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