Baker Hughes Inc. (BHI): 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.

Baker Hughes ( BHI) pushed the Basic Materials sector lower today making it today's featured Basic Materials laggard. The sector as a whole closed the day down 0.4%. By the end of trading, Baker Hughes fell $1.24 (-2.6%) to $46.72 on average volume. Throughout the day, 4.2 million shares of Baker Hughes exchanged hands as compared to its average daily volume of 3.7 million shares. The stock ranged in price between $46.43-$47.38 after having opened the day at $47.19 as compared to the previous trading day's close of $47.96. Other companies within the Basic Materials sector that declined today were: Ivanhoe Energy ( IVAN), down 13%, Syntroleum Corporation ( SYNM), down 12.3%, Alderon Iron Ore ( AXX), down 7.9%, and China Gengsheng Minerals ( CHGS), down 7.3%.
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Baker Hughes Incorporated supplies oilfield services, products, and technology services and systems to the oil and natural gas industry worldwide. Baker Hughes has a market cap of $20.86 billion and is part of the energy industry. The company has a P/E ratio of 15.9, below the S&P 500 P/E ratio of 17.7. Shares are up 17.4% year to date as of the close of trading on Friday. Currently there are nine analysts that rate Baker Hughes a buy, no analysts rate it a sell, and 17 rate it a hold.

TheStreet Ratings rates Baker Hughes as a hold. The company's strengths can be seen in multiple areas, such as its largely solid financial position with reasonable debt levels by most measures, attractive valuation levels and good cash flow from operations. However, as a counter to these strengths, we also find weaknesses including deteriorating net income, disappointing return on equity and poor profit margins.

On the positive front, GMX Resources ( GMXR), up 15.9%, USEC ( USU), up 13.5%, Adams Resources & Energy ( AE), up 11.6%, and Constellation Energy Partners ( CEP), up 10.8%, were all gainers within the basic materials sector with Yamana Gold ( AUY) 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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