Hess Corp (HES): 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.

Hess ( HES) pushed the Basic Materials sector lower today making it today's featured Basic Materials laggard. The sector as a whole closed the day up 0.7%. By the end of trading, Hess fell $1.47 (-2.2%) to $66.02 on average volume. Throughout the day, 5.5 million shares of Hess exchanged hands as compared to its average daily volume of 4.3 million shares. The stock ranged in price between $66-$67.92 after having opened the day at $67.85 as compared to the previous trading day's close of $67.49. Other companies within the Basic Materials sector that declined today were: Kimber Resources ( KBX), down 13.8%, Arch Coal ( ACI), down 12.8%, Prospect Global Resources ( PGRX), down 11.2%, and Pacific Ethanol ( PEIX), down 8.5%.
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Hess Corporation, together with its subsidiaries, operates as an integrated energy company. The company operates in two segments, Exploration and Production (E&P) and Marketing and Refining (M&R). Hess has a market cap of $23.3 billion and is part of the energy industry. The company has a P/E ratio of 10.5, below the S&P 500 P/E ratio of 17.7. Shares are up 28.8% year to date as of the close of trading on Monday. Currently there are nine analysts that rate Hess a buy, no analysts rate it a sell, and eight rate it a hold.

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

On the positive front, Constellation Energy Partners ( CEP), up 30.8%, BMB Munai ( BMBM), up 29.3%, Quaterra Resources ( QMM), up 16.9%, and Fortuna Silver Mines ( FSM), up 11.7%, were all gainers within the basic materials sector with Williams Companies ( WMB) 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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