Ecopetrol S.A. Stock Upgraded (EC).

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Fuente: TheStreet.com

Ecopetrol (NYSE:EC) has been upgraded by TheStreet Ratings from hold to buy. The company's strengths can be seen in multiple areas, such as its solid stock price performance, impressive record of earnings per share growth, compelling growth in net income, robust revenue growth and expanding profit margins. We feel these strengths outweigh the fact that the company shows weak operating cash flow.

Highlights from the ratings report include:

• 48.70% is the gross profit margin for ECOPETROL SA which we consider to be strong. It has increased from the same quarter the previous year. Along with this, the net profit margin of 24.80% significantly outperformed against the industry average.
• Despite its growing revenue, the company underperformed as compared with the industry average of 26.0%. Since the same quarter one year prior, revenues rose by 21.3%. Growth in the company's revenue appears to have helped boost the earnings per share.
• The net income growth from the same quarter one year ago has exceeded that of the S&P 500 and the Oil, Gas & Consumable Fuels industry average. The net income increased by 52.6% when compared to the same quarter one year prior, rising from $740.91 million to $1,130.70 million.
• ECOPETROL SA reported significant earnings per share improvement in the most recent quarter compared to the same quarter a year ago. The company has demonstrated a pattern of positive earnings per share growth over the past year. We feel that this trend should continue. During the past fiscal year, ECOPETROL SA increased its bottom line by earning $2.06 versus $1.26 in the prior year. This year, the market expects an improvement in earnings ($3.61 versus $2.06).
• Powered by its strong earnings growth of 51.35% and other important driving factors, this stock has surged by 55.12% over the past year, outperforming the rise in the S&P 500 Index during the same period. Turning to the future, naturally, any stock can fall in a major bear market. However, in almost any other environment, the stock should continue to move higher despite the fact that it has already enjoyed nice gains in the past year.

Ecopetrol S.A. engages primarily in the exploration, production, refining, transportation, and commercialization of crude oil and gas in Columbia. It explores hydrocarbons in 32 blocks of Colombian territory directly, as well as in 15 blocks with other companies. The company has a P/E ratio of 27.3, above the S&P 500 P/E ratio of 17. Ecopetrol has a market cap of $88.4 billion and is part of the basic materials sector and energy industry. Shares are up 0.4% year to date as of the close of trading on Friday.

You can view the full Ecopetrol Ratings Report or get investment ideas from our investment research center.