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3 Stocks Pushing The Chemicals Industry Lower

Editor's Note: Any reference to TheStreet Ratings and its underlying recommendation does not reflect the opinion of TheStreet, Inc. or any of its contributors including Jim Cramer or Stephanie Link.

The Chemicals industry as a whole was unchanged today versus the S&P 500, which was unchanged. Laggards within the Chemicals industry included Metabolix ( MBLX), down 4.4%, Methes Energies International ( MEIL), down 2.6%, Synthesis Energy Sys ( SYMX), down 3.5%, Penford ( PENX), down 8.6% and Gevo ( GEVO), down 1.8%.

TheStreet Ratings Group would like to highlight 3 stocks that pushed the industry lower today:

Penford ( PENX) is one of the companies that pushed the Chemicals industry lower today. Penford was down $1.18 (8.6%) to $12.57 on heavy volume. Throughout the day, 92,016 shares of Penford exchanged hands as compared to its average daily volume of 50,800 shares. The stock ranged in price between $12.48-$13.71 after having opened the day at $13.60 as compared to the previous trading day's close of $13.75.

Penford Corporation, together with its subsidiaries, develops, manufactures, and markets specialty natural-based ingredient systems for food and industrial applications primarily in the United States. Penford has a market cap of $161.0 million and is part of the basic materials sector. Shares are up 7.0% year-to-date as of the close of trading on Tuesday. Currently there are no analysts who rate Penford a buy, no analysts rate it a sell, and 1 rates it a hold.

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TheStreet Ratings rates Penford as a hold. The company's strengths can be seen in multiple areas, such as its increase in net income, good cash flow from operations and largely solid financial position with reasonable debt levels by most measures. However, as a counter to these strengths, we also find weaknesses including a generally disappointing performance in the stock itself and poor profit margins.

Highlights from TheStreet Ratings analysis on PENX go as follows:

  • The net income growth from the same quarter one year ago has significantly exceeded that of the Chemicals industry average, but is less than that of the S&P 500. The net income increased by 4.1% when compared to the same quarter one year prior, going from $1.19 million to $1.24 million.
  • Net operating cash flow has significantly increased by 92.12% to -$0.28 million when compared to the same quarter last year. In addition, PENFORD CORP has also vastly surpassed the industry average cash flow growth rate of -1.65%.
  • PENFORD CORP reported flat earnings per share in the most recent quarter. This company has reported somewhat volatile earnings recently. But, we feel it is poised for EPS growth in the coming year. During the past fiscal year, PENFORD CORP turned its bottom line around by earning $0.32 versus -$0.77 in the prior year. This year, the market expects an improvement in earnings ($0.55 versus $0.32).
  • The gross profit margin for PENFORD CORP is currently extremely low, coming in at 14.59%. Regardless of PENX's low profit margin, it has managed to increase from the same period last year. Despite the mixed results of the gross profit margin, PENX's net profit margin of 1.16% is significantly lower than the industry average.
  • PENX has underperformed the S&P 500 Index, declining 17.58% from its price level of one year ago. Looking ahead, other than the push or pull of the broad market, we do not see anything in the company's numbers that may help reverse the decline experienced over the past 12 months. Despite the past decline, the stock is still selling for more than most others in its industry.

You can view the full analysis from the report here: Penford 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.

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