Declines From Suncor Energy Inc (SU) Drive Down Basic Materials Sector

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.

Suncor Energy ( SU) pushed the Basic Materials sector lower today making it today's featured Basic Materials laggard. The sector as a whole closed the day up 0.5%. By the end of trading, Suncor Energy fell 34 cents (-1.2%) to $28.44 on heavy volume. Throughout the day, six million shares of Suncor Energy exchanged hands as compared to its average daily volume of 3.9 million shares. The stock ranged in price between $28.24-$28.79 after having opened the day at $28.72 as compared to the previous trading day's close of $28.78. Other companies within the Basic Materials sector that declined today were: Torch Energy Royalty ( TRU), down 10.8%, Metabolix ( MBLX), down 9.4%, GeoGlobal Resources ( GGR), down 8.5%, and Great Basin Gold ( GBG), down 7.8%.
  • EXCLUSIVE OFFER: Jim Cramer's Protégé, Dave Peltier, only buys Stocks Under $10 that he thinks could potentially double. See what he's trading today with a 14-day FREE pass.

Suncor Energy Inc., together with its subsidiaries, operates as an integrated energy company. Suncor Energy has a market cap of $44.05 billion and is part of the energy industry. The company has a P/E ratio of 16.1, below the S&P 500 P/E ratio of 17.7. Shares are down 12.7% year to date as of the close of trading on Friday. Currently there are 10 analysts that rate Suncor Energy a buy, no analysts rate it a sell, and none rate it a hold.

TheStreet Ratings rates Suncor Energy 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 and reasonable valuation levels. However, as a counter to these strengths, we also find weaknesses including feeble growth in the company's earnings per share, deteriorating net income and disappointing return on equity.

On the positive front, Lufkin Industries ( LUFK), up 37.6%, Sutor Technology Group ( SUTR), up 18.1%, Mines Management ( MGN), up 10.5%, and Gastar Exploration ( GST), up 8.8%, were all gainers within the basic materials sector with Pioneer Natural Resources Company ( PXD) 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).

Exclusive Offer: Jim Cramer's 'go-to' small/mid-cap guru Bryan Ashenberg only buys stocks he thinks could return 50-100% See his top picks for 14-days FREE.
null