Is McMoRan Exploration’s Stock a Sell Now?

E = Equity to Debt Ratio is Normal

The debt-to-equity ratio for McMoRan Exploration is fine. However, the balance sheet could be a little stronger. While comparing McMoRan Exploration to Chevron Corporation (AMEX:CVR) isn’t exactly comparing apples-to-apples, it’s a good barometer. For more of an apples-to-apples comparison, Forest Oil Corporation (NYSE:FST) has been included.   

Debt-To-Equity

Cash

Long-Term Debt

MMR

.35

$191.93 Million

$556.78 Million

CVX

.09

$21.58 Billion

$12.34 Billion

FST

8.62

$39.17 Million

$2.09 Billion

 

T = Technicals on the Stock Chart Are Poor

McMoRan Exploration might be a relatively new company searching for a big find, and that means investors should be patient, but the last year has been brutal.

1 Month

Year-To-Date

1 Year

3 Year

MMR

-30.26%

-41.86%

-46.69%

23.14%

CVX

-3.01%

1.24%

5.93%

47.65%

FST

-16.67%

-55.17%

-62.19%

-68.11%

 

At $8.48, McMoRan Exploration is currently trading significantly lower than its 50-day SMA of $11.54. It’s also trading significantly lower than its 100-day SMA of $12.32. And it’s trading lower than its 200-day SMA of $11.57.

 E = Earnings and Revenue Are Sporadic

This is normal for an Independent Oil & Gas company. Investors aren’t overly concerned with current revenue or annual revenue patterns. They’re more concerned with the company reaching and extracting black gold.

2007

2008

2009

2010

2011

Revenue ($)in millions

481.17

1.572B

435.44

434.48

555.41

Diluted EPS ($)

-1.86

-3.88

-2.87

-2.08

-.37

 

Quarterly earnings and revenue have also been sporadic.

9/2011

12/2011

3/2012

6/2012

9/2012

Revenue ($)in millions

138.18

121.92

110.65

90.30

91.78

Diluted EPS ($)

-.06

.18

-.03

-.47

-.40