NEW YORK (TheStreet) -- Shares of Seadrill were falling 3% to $10.28 Wednesday due to rising U.S. oil stockpiles and falling oil prices. The U.S. Energy Information Administration announced that U.S. crude oil inventories grew by 10.9 million barrels in the week that ended on April 3. The increase is the largest one-week increase in crude oil stockpiles since 2001, according to the Wall Street Journal. U.S. crude oil inventories now hold 482.4 million barrels, according to the government agency, their highest levels in at least the last 80 years. WTI crude oil for May delivery was down 6.2% to $50.65 a barrel Wednesday afternoon as a result of the increasing oil inventories and Brent crude oil for May delivery was down 5.6% to $55.77 a barrel. Seadrill is an offshore drilling contractor that provides offshore drilling services to oil and gas companies. The company owns and operates jack-up rigs, tender rigs, semi-submersible rigs, and drillships and can operate in shallow, mid, and deepwater areas. TheStreet Ratings team rates SEADRILL LTD as a Hold with a ratings score of C-. TheStreet Ratings Team has this to say about their recommendation: "We rate SEADRILL LTD (SDRL) 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 notable return on equity, attractive valuation levels and expanding profit margins. However, as a counter to these strengths, we also find weaknesses including generally higher debt management risk, weak operating cash flow and a generally disappointing performance in the stock itself." Highlights from the analysis by TheStreet Ratings Team goes as follows: Current return on equity exceeded its ROE from the same quarter one year prior. This is a clear sign of strength within the company. Compared to other companies in the Energy Equipment & Services industry and the overall market, SEADRILL LTD's return on equity significantly exceeds that of both the industry average and the S&P 500. SDRL, with its decline in revenue, underperformed when compared the industry average of 14.7%. Since the same quarter one year prior, revenues fell by 14.2%. Weakness in the company's revenue seems to have hurt the bottom line, decreasing earnings per share. The debt-to-equity ratio of 1.35 is relatively high when compared with the industry average, suggesting a need for better debt level management. To add to this, SDRL has a quick ratio of 0.66, this demonstrates the lack of ability of the company to cover short-term liquidity needs. Net operating cash flow has decreased to $287.00 million or 41.66% 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. You can view the full analysis from the report here: SDRL Ratings Report Must Read: Warren Buffett's Top 25 Stocks for 2015
Click to view a price quote on SDRL. Click to research the Energy industry.
from Latest TSC Headlines http://ift.tt/1CgRX2m
No comments:
Post a Comment