Whiting Petroleum (WLL) Stock Advancing on Higher Oil Prices

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by Michael Mosher
June 5, 20150 comments

According To TheStreet,  Shares of Whiting Petroleum (WLL) are rising by 4.65% to $33.79 in late afternoon trading on Friday, as some energy and related stocks get a jolt from the rebound in oil prices.

Oil is gaining after Baker Hughes (BHI) said that the number of drilling rigs in the U.S. declined for the 26th straight week, Reuters reports.

Crude oil (WTI) is rising by 1.53% to $58.89 per barrel and Brent crude is up by 1.79% to $63.14 per barrel this afternoon, according to the CNBC.com index.
The rig count dropped by four with the national total now standing at 642 rigs.

Additionally, on Thursday analysts at Deutsche Bank upgraded their rating on Whiting Petroleum to buy from hold as they believe the companys position in the DJ Basin is undervalued.

Separately, TheStreet Ratings team rates WHITING PETROLEUM CORP as a Hold with a ratings score of C-. TheStreet Ratings Team has this to say about their recommendation:

We rate WHITING PETROLEUM CORP (WLL) 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 companys strengths can be seen in multiple areas, such as its largely solid financial position with reasonable debt levels by most measures and expanding profit margins. However, as a counter to these strengths, we also find weaknesses including feeble growth in the companys earnings per share, deteriorating net income and disappointing return on equity.

Highlights from the analysis by TheStreet Ratings Team goes as follows:

The debt-to-equity ratio is somewhat low, currently at 0.77, 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 WLLs debt-to-equity ratio is low, the quick ratio, which is currently 0.69, displays a potential problem in covering short-term cash needs.
Despite the weak revenue results, WLL has outperformed against the industry average of 38.6%. Since the same quarter one year prior, revenues fell by 27.9%. Weakness in the companys revenue seems to have hurt the bottom line, decreasing earnings per share.
The gross profit margin for WHITING PETROLEUM CORP is rather high; currently it is at 59.91%. Despite the high profit margin, it has decreased significantly from the same period last year. Despite the mixed results of the gross profit margin, WLLs net profit margin of -20.18% significantly underperformed when compared to the industry average.
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 197.3% when compared to the same quarter one year ago, falling from $109.07 million to -$106.11 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, WHITING PETROLEUM CORPs return on equity significantly trails that of both the industry average and the S&P 500.