Royal Dutch Shell PLC (RDS.B): 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.

Royal Dutch Shell ( RDS.B) pushed the Basic Materials sector lower today making it today's featured Basic Materials laggard. The sector as a whole closed the day down 0.5%. By the end of trading, Royal Dutch Shell fell $1.02 (-1.4%) to $73.50 on average volume. Throughout the day, 825,325 shares of Royal Dutch Shell exchanged hands as compared to its average daily volume of 650,000 shares. The stock ranged in price between $72.73-$73.67 after having opened the day at $72.90 as compared to the previous trading day's close of $74.52. Other companies within the Basic Materials sector that declined today were: Geokinetics ( GOK), down 22.4%, United States Antimony Corporation ( UAMY), down 13.2%, Kimber Resources ( KBX), down 12.7%, and Voyager Oil & Gas ( VOG), down 10.4%.
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Royal Dutch Shell plc operates as an oil and gas company worldwide. The company explores for and extracts crude oil and natural gas. Royal Dutch Shell has a market cap of $237.49 billion and is part of the energy industry. The company has a P/E ratio of 9.5, below the S&P 500 P/E ratio of 17.7. Shares are down 2% year to date as of the close of trading on Wednesday.

TheStreet Ratings rates Royal Dutch Shell as a buy. The company's strengths can be seen in multiple areas, such as its attractive valuation levels, good cash flow from operations, increase in stock price during the past year and largely solid financial position with reasonable debt levels by most measures. We feel these strengths outweigh the fact that the company has had sub par growth in net income.

On the positive front, Lone Pine Resources ( LPR), up 18.2%, USEC ( USU), up 13.7%, Solitario Exploration & Royalty ( XPL), up 12.9%, and Ossen Innovation ( OSN), up 11.6%, were all gainers within the basic materials sector with Transocean ( RIG) 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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