SM Energy Co (SM): Today's Featured Basic Materials Winner

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.

SM Energy ( SM) pushed the Basic Materials sector higher today making it today's featured basic materials winner. The sector as a whole closed the day down 0.5%. By the end of trading, SM Energy rose $1.31 (2.5%) to $54.11 on average volume. Throughout the day, 1.2 million shares of SM Energy exchanged hands as compared to its average daily volume of one million shares. The stock ranged in a price between $52.04-$54.67 after having opened the day at $52.37 as compared to the previous trading day's close of $52.80. Other companies within the Basic Materials sector that increased today were: Atlatsa Resources ( ATL), up 24.3%, Lizhan Environmental ( LZEN), up 15.4%, Longwei Petroleum Investment Holding Limite ( LPH), up 10.7%, and Synergy Resources Corporation ( SYRG), up 10.6%.
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SM Energy Company, an independent energy company, together with its subsidiaries, engages in the acquisition, exploration, exploitation, development, and production of crude oil, natural gas, and natural gas liquids in North America. SM Energy has a market cap of $3.25 billion and is part of the energy industry. The company has a P/E ratio of 21.1, above the average energy industry P/E ratio of 21 and above the S&P 500 P/E ratio of 17.7. Shares are down 31.8% year to date as of the close of trading on Thursday. Currently there are 16 analysts that rate SM Energy a buy, no analysts rate it a sell, and four rate it a hold.

TheStreet Ratings rates SM Energy as a hold. The company's strengths can be seen in multiple areas, such as its good cash flow from operations and expanding profit margins. However, as a counter to these strengths, we also find weaknesses including a generally disappointing performance in the stock itself, unimpressive growth in net income and disappointing return on equity.

On the negative front, GeoPetro Resources Company ( GPR), down 14.9%, Geokinetics ( GOK), down 9.7%, Ivanhoe Energy ( IVAN), down 7.1%, and Cal Dive International ( DVR), down 6.7%, were all laggards within the basic materials sector with Petroleo Brasileiro SA Petrobras ( PBR.A) being today's basic materials sector laggard.

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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