Georgia Gulf Corp (GGC): 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.

Georgia Gulf ( GGC) 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, Georgia Gulf fell $1.04 (-1.9%) to $54.02 on average volume. Throughout the day, 2.5 million shares of Georgia Gulf exchanged hands as compared to its average daily volume of 2.3 million shares. The stock ranged in price between $51.39-$54.63 after having opened the day at $54.50 as compared to the previous trading day's close of $55.06. Other companies within the Basic Materials sector that declined today were: CKX Lands ( CKX), down 15.1%, Global Geophysical Services ( GGS), down 13.9%, American Pacific Corporation ( APFC), down 12.6%, and Cardero Resources Corporation ( CDY), down 12.1%.
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Georgia Gulf Corporation engages in the manufacture and marketing of chemicals and building products in the United States and internationally. It operates through three segments: Chlorovinyls, Building Products, and Aromatics. Georgia Gulf has a market cap of $1.89 billion and is part of the chemicals industry. The company has a P/E ratio of 16.1, below the S&P 500 P/E ratio of 17.7. Shares are up 34.8% year to date as of the close of trading on Monday. Currently there are two analysts that rate Georgia Gulf a buy, no analysts rate it a sell, and five rate it a hold.

TheStreet Ratings rates Georgia Gulf as a buy. The company's strengths can be seen in multiple areas, such as its solid stock price performance, growth in earnings per share, increase in net income and attractive valuation levels. We feel these strengths outweigh the fact that the company shows weak operating cash flow.

On the positive front, Houston American Energy Corporation ( HUSA), up 22.7%, US Silica Holdings ( SLCA), up 17.8%, Timberline Resources Corporation ( TLR), up 15.2%, and GMX Resources ( GMXR), up 12.2%, were all gainers within the basic materials sector with Valero Energy Corporation ( VLO) 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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