Weatherford International Ltd (WFT): Today's Featured Basic Materials Laggard

Editor's Note: TheStreet ratings do not represent the views of TheStreet's staff or its contributors. Ratings are established by computer based on metrics for performance (which includes growth, stock performance, efficiency and valuation) and risk (volatility and solvency). Companies with poor cash flow or high debt levels tend to earn lower ratings in our model.

Weatherford International ( WFT) pushed the Basic Materials sector lower today making it today's featured Basic Materials laggard. The sector as a whole closed the day up 0.4%. By the end of trading, Weatherford International fell 31 cents (-2.5%) to $12.15 on average volume. Throughout the day, 9.2 million shares of Weatherford International exchanged hands as compared to its average daily volume of 10.5 million shares. The stock ranged in price between $12.01-$12.35 after having opened the day at $12.27 as compared to the previous trading day's close of $12.46. Other companies within the Basic Materials sector that declined today were: Great Basin Gold ( GBG), down 45.5%, Forbes Energy Services ( FES), down 19.7%, ATP Oil & Gas ( ATPG), down 16.4%, and Royale Energy ( ROYL), down 9.8%.

Weatherford International Ltd. provides equipment and services used in the drilling, evaluation, completion, production, and intervention of oil and natural gas wells worldwide. Weatherford International has a market cap of $9.67 billion and is part of the energy industry. The company has a P/E ratio of 27.7, above the average energy industry P/E ratio of 23.1 and above the S&P 500 P/E ratio of 17.7. Shares are down 11.3% year to date as of the close of trading on Tuesday. Currently there are 13 analysts that rate Weatherford International a buy, two analysts rate it a sell, and six rate it a hold.

TheStreet Ratings rates Weatherford International as a hold. Among the primary strengths of the company is its robust revenue growth -- not just in the most recent periods but in previous quarters as well. At the same time, however, we find that we feel that the company's cash flow from its operations has been weak overall.

On the positive front, Renewable Energy Group ( REGI), up 27.2%, China Shen Zhou Mining & Resources ( SHZ), up 12.2%, Prospect Global Resources ( PGRX), up 11.9%, and US Silica Holdings ( SLCA), up 11.8%, were all gainers within the basic materials sector with Continental Resources ( CLR) being today's featured basic materials sector leader.

For investors not wanting singular stock exposure, ETFs may be of interest. Investors who are bullish on the basic materials sector could consider Materials Select Sector SPDR ( XLB) while those bearish on the basic materials sector could consider ProShares Short Basic Materials Fd ( SBM).
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