Hess (HES) Stock Declines Today After Cutting Capital ExpendituresBy twocents@thestreet (Tony Owusu) NEW YORK (TheStreet) -- Hess shares are down 1.21% to $70.78 in early market trading on Tuesday after the oil and natural gas producer announced cuts to its capital budget after the closing bell yesterday. The company announced a 16% cutBy twocents@thestreet (Tony Owusu) NEW YORK (TheStreet) -- Hess shares are down 1.21% to $70.78 in early market trading on Tuesday after the oil and natural gas producer announced cuts to its capital budget after the closing bell yesterday. The company announced a 16% cut in its capital budget to $4.7 billion in 2015 as falling crude prices continue to send ripple effects throughout the industry. Exclusive Report: Jim Cramers Best Stocks for 2015 STOCKS TO BUY: TheStreet Quant Ratings has identified a handful of stocks that can potentially TRIPLE in the next 12 months. Learn more. The companys largest expenditure will be in North Dakotas Bakken Shale with the company spending $1.8 billion in the state, down from the $2.2 billion it spent in the region last year. Hess has some of the best acreage in the Bakken, and we will continue to drill in the core of the play which offers the most attractive returns. Substantially all our core acreage is held by production, which allows us to defer investment in the short term while maintaining the long term value and optionality of this important asset. As oil prices recover we will increase activity and production accordingly, said president and COO Greg Hill. TheStreet Ratings team rates HESS CORP as a Hold with a ratings score of C+. TheStreet Ratings Team has this to say about their recommendation: We rate HESS CORP (HES) 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 revenue growth, largely solid financial position with reasonable debt levels by most measures and reasonable valuation levels. However, as a counter to these strengths, we also find weaknesses including disappointing return on equity and a generally disappointing performance in the stock itself. Highlights from the analysis by TheStreet Ratings Team goes as follows: HESs revenue growth has slightly outpaced the industry average of 6.7%. Since the same quarter one year prior, revenues slightly increased by 0.9%. Growth in the companys revenue appears to have helped boost the earnings per share. HESs debt-to-equity ratio is very low at 0.25 and is currently below that of the industry average, implying that there has been very successful management of debt levels. Along with the favorable debt-to-equity ratio, the company maintains an adequate quick ratio of 1.43, which illustrates the ability to avoid short-term cash problems. The gross profit margin for HESS CORP is rather high; currently it is at 63.46%. Regardless of HESs high profit margin, it has managed to decrease from the same period last year. Despite the mixed results of the gross profit margin, HESs net profit margin of 36.72% significantly outperformed against the industry. HES has underperformed the S&P 500 Index, declining 7.75% 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. The companys current return on equity has slightly decreased from the same quarter one year prior. This implies a minor weakness in the organization. In comparison to the other companies in the Oil, Gas & Consumable Fuels industry and the overall market, HESS CORPs return on equity is significantly below that of the industry average and is below that of the S&P 500. You can view the full analysis from the report here: HES Ratings Report STOCKS TO BUY: TheStreet Quant Ratings has identified a handful of stocks that can potentially TRIPLE in the next 12 months. Learn more. Click to view a price quote on HES. Click to research the Energy industry. ift.tt/1gB4pon
Posted on: Tue, 27 Jan 2015 16:34:48 +0000
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