Ensco PLC (ESV): 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.

Ensco ( ESV) pushed the Basic Materials sector lower today making it today's featured Basic Materials laggard. The sector as a whole closed the day up 0.3%. By the end of trading, Ensco fell 91 cents (-1.5%) to $58.68 on average volume. Throughout the day, 2.6 million shares of Ensco exchanged hands as compared to its average daily volume of 2.4 million shares. The stock ranged in price between $58.34-$59.67 after having opened the day at $59.60 as compared to the previous trading day's close of $59.59. Other companies within the Basic Materials sector that declined today were: HKN ( HKN), down 21.3%, Cereplast ( CERP), down 11.8%, Torch Energy Royalty ( TRU), down 11.1%, and Prospect Global Resources ( PGRX), down 10.6%.
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Ensco plc provides offshore contract drilling services to the oil and gas industry worldwide. Ensco has a market cap of $13.82 billion and is part of the energy industry. The company has a P/E ratio of 11.6, below the S&P 500 P/E ratio of 17.7. Shares are up 27% year to date as of the close of trading on Friday. Currently there are 18 analysts that rate Ensco a buy, no analysts rate it a sell, and three rate it a hold.

TheStreet Ratings rates Ensco as a buy. The company's strengths can be seen in multiple areas, such as its robust revenue growth, solid stock price performance, expanding profit margins, good cash flow from operations and compelling growth in net income. Although the company may harbor some minor weaknesses, we feel they are unlikely to have a significant impact on results.

On the positive front, Atlatsa Resources ( ATL), up 19.4%, Equal Energy ( EQU), up 15.8%, Recon Technology ( RCON), up 11.9%, and Entree Gold ( EGI), up 11.2%, were all gainers within the basic materials sector with Marathon Oil ( MRO) 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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