Ashland Inc (ASH): Today's Featured Chemicals 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.

Ashland ( ASH) pushed the Chemicals industry lower today making it today's featured Chemicals laggard. The industry as a whole closed the day down 0.8%. By the end of trading, Ashland fell $1.10 (-1.5%) to $74.48 on average volume. Throughout the day, 721,252 shares of Ashland exchanged hands as compared to its average daily volume of 770,800 shares. The stock ranged in price between $74.35-$75.67 after having opened the day at $75.41 as compared to the previous trading day's close of $75.58. Other companies within the Chemicals industry that declined today were: Pacific Ethanol ( PEIX), down 19.1%, BioFuel Energy Corporation ( BIOF), down 12.8%, Metabolix ( MBLX), down 6.6%, and Renewable Energy Group ( REGI), down 6.3%.
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Ashland Inc. operates as a specialty chemicals company in the United States and internationally. It operates through four segments: Specialty Ingredients, Water Technologies, Performance Materials, and Consumer Markets. Ashland has a market cap of $6 billion and is part of the basic materials sector. The company has a P/E ratio of 152.8, above the average chemicals industry P/E ratio of 32.2 and above the S&P 500 P/E ratio of 17.7. Shares are up 33.7% year to date as of the close of trading on Monday. Currently there are nine analysts that rate Ashland a buy, no analysts rate it a sell, and none rate it a hold.

TheStreet Ratings rates Ashland as a buy. The company's strengths can be seen in multiple areas, such as its robust revenue growth, increase in net income, good cash flow from operations, solid stock price performance and growth in earnings per share. We feel these strengths outweigh the fact that the company has had somewhat disappointing return on equity.

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

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