3 Stocks Pushing The Basic Materials Sector Lower - TheStreet

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The Basic Materials sector as a whole closed the day down 1.2% versus the S&P 500, which was up 0.1%. Laggards within the Basic Materials sector included

Pacific Booker Minerals

(

PBM

), down 2.9%,

Atlatsa Resources

(

ATL

), down 2.1%,

Barnwell Industries

(

BRN

), down 2.0%,

Quest Rare Minerals

(

QRM

), down 3.0% and

New Concept Energy

(

GBR

), down 4.5%.

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

Ecopetrol

(

EC

) is one of the companies that pushed the Basic Materials sector lower today. Ecopetrol was down $0.61 (2.5%) to $23.88 on light volume. Throughout the day, 323,650 shares of Ecopetrol exchanged hands as compared to its average daily volume of 660,000 shares. The stock ranged in price between $23.78-$24.47 after having opened the day at $24.47 as compared to the previous trading day's close of $24.49.

Ecopetrol S.A., an integrated oil company, is engaged in the exploration, development, and production of crude oil and natural gas primarily in Colombia, Peru, Brazil, and the United States Gulf Coast. Ecopetrol has a market cap of $51.0 billion and is part of the energy industry. Shares are down 36.3% year-to-date as of the close of trading on Tuesday. Currently there is 1 analyst who rates Ecopetrol a buy, 3 analysts rate it a sell, and 1 rates it a hold.

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TheStreet Ratings rates

Ecopetrol

as a

hold

. The company's strengths can be seen in multiple areas, such as its attractive valuation levels, 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 company's earnings per share, deteriorating net income and weak operating cash flow.

Highlights from TheStreet Ratings analysis on EC go as follows:

  • The current debt-to-equity ratio, 0.45, is low and is below the industry average, implying that there has been successful management of debt levels. Although the company had a strong debt-to-equity ratio, its quick ratio of 0.83 is somewhat weak and could be cause for future problems.
  • 41.90% is the gross profit margin for ECOPETROL SA which we consider to be strong. Regardless of EC's high profit margin, it has managed to decrease from the same period last year. Despite the mixed results of the gross profit margin, EC's net profit margin of 12.17% compares favorably 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 50.5% when compared to the same quarter one year ago, falling from $2,059.01 million to $1,019.03 million.
  • Net operating cash flow has decreased to $2,807.39 million or 26.47% when compared to the same quarter last year. In addition, when comparing the cash generation rate to the industry average, the firm's growth is significantly lower.

You can view the full analysis from the report here:

Ecopetrol Ratings Report

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At the close,

Quest Rare Minerals

(

QRM

) was down $0.00 (3.0%) to $0.13 on light volume. Throughout the day, 16,176 shares of Quest Rare Minerals exchanged hands as compared to its average daily volume of 95,600 shares. The stock ranged in price between $0.13-$0.14 after having opened the day at $0.14 as compared to the previous trading day's close of $0.14.

Quest Rare Minerals has a market cap of $10.9 million and is part of the energy industry. Shares are down 70.5% year-to-date as of the close of trading on Tuesday.

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Atlatsa Resources

(

ATL

) was another company that pushed the Basic Materials sector lower today. Atlatsa Resources was down $0.00 (2.1%) to $0.18 on average volume. Throughout the day, 34,220 shares of Atlatsa Resources exchanged hands as compared to its average daily volume of 45,500 shares. The stock ranged in price between $0.18-$0.19 after having opened the day at $0.19 as compared to the previous trading day's close of $0.19.

Atlatsa Resources Corporation mines, explores for, and develops platinum group metals properties in South Africa. The company primarily explores for platinum, palladium, rhodium, gold, copper, and nickel. Atlatsa Resources has a market cap of $108.5 million and is part of the energy industry. Shares are down 66.0% year-to-date as of the close of trading on Tuesday. Currently there are no analysts who rate Atlatsa Resources a buy, 1 analyst rates it a sell, and none rate it a hold.

TheStreet Ratings rates

Atlatsa Resources

as a

hold

. The company's strengths can be seen in multiple areas, such as its notable return on equity, robust revenue growth and impressive record of earnings per share growth. However, as a counter to these strengths, we also find weaknesses including poor profit margins and a generally disappointing performance in the stock itself.

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Highlights from TheStreet Ratings analysis on ATL go as follows:

  • Compared to other companies in the Metals & Mining industry and the overall market, ATLATSA RESOURCES CORP's return on equity significantly exceeds that of both the industry average and the S&P 500.
  • The revenue growth came in higher than the industry average of 3.0%. Since the same quarter one year prior, revenues rose by 20.9%. This growth in revenue appears to have trickled down to the company's bottom line, improving the earnings per share.
  • Despite currently having a low debt-to-equity ratio of 0.49, it is higher than that of the industry average, inferring that management of debt levels may need to be evaluated further. Regardless of the somewhat mixed results with the debt-to-equity ratio, the company's quick ratio of 0.83 is weak.
  • ATL's stock share price has done very poorly compared to where it was a year ago: Despite any rallies, the net result is that it is down by 66.00%, which is also worse that the performance of the S&P 500 Index. Investors have so far failed to pay much attention to the earnings improvements the company has managed to achieve over the last quarter. Naturally, the overall market trend is bound to be a significant factor. However, in one sense, the stock's sharp decline last year is a positive for future investors, making it cheaper (in proportion to its earnings over the past year) than most other stocks in its industry. But due to other concerns, we feel the stock is still not a good buy right now.
  • The gross profit margin for ATLATSA RESOURCES CORP is currently extremely low, coming in at 4.14%. It has decreased from the same quarter the previous year. Along with this, the net profit margin of -11.90% is significantly below that of the industry average.

You can view the full analysis from the report here:

Atlatsa Resources 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.