3 Stocks Pushing The Materials & Construction Industry Lower

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The Materials & Construction industry as a whole closed the day down 0.3% versus the S&P 500, which was up 0.1%. Laggards within the Materials & Construction industry included Industrial Services of America ( IDSA), down 3.0%, China Recycling Energy ( CREG), down 2.4%, Deltic Timber ( DEL), down 3.0%, Nortek ( NTK), down 2.2% and Vertex Energy ( VTNR), down 10.7%.

TheStreet Ratings Group would like to highlight 3 stocks that pushed the industry lower today:

Nortek ( NTK) is one of the companies that pushed the Materials & Construction industry lower today. Nortek was down $1.93 (2.2%) to $84.24 on light volume. Throughout the day, 7,590 shares of Nortek exchanged hands as compared to its average daily volume of 26,200 shares. The stock ranged in price between $83.47-$85.45 after having opened the day at $84.54 as compared to the previous trading day's close of $86.17.

Nortek, Inc. manufactures and sells products for remodeling and replacement, residential and commercial new construction, manufactured housing, and personal and enterprise computer markets primarily in the United States, Canada, and Europe. Nortek has a market cap of $1.3 billion and is part of the industrial goods sector. Shares are up 15.5% year-to-date as of the close of trading on Monday. Currently there are no analysts who rate Nortek a buy, no analysts rate it a sell, and 1 rates it a hold.

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TheStreet Ratings rates Nortek as a hold. The company's strengths can be seen in multiple areas, such as its revenue growth, increase in stock price during the past year and impressive record of earnings per share growth. However, as a counter to these strengths, we also find weaknesses including generally higher debt management risk, weak operating cash flow and poor profit margins.

Highlights from TheStreet Ratings analysis on NTK go as follows:

  • The revenue growth came in higher than the industry average of 5.0%. Since the same quarter one year prior, revenues slightly increased by 6.0%. Growth in the company's revenue appears to have helped boost the earnings per share.
  • Compared to where it was a year ago today, the stock is now trading at a higher level, reflecting both the market's overall trend during that period and the fact that the company's earnings growth has been robust. Despite the fact that it has already risen in the past year, there is currently no conclusive evidence that warrants the purchase or sale of this stock.
  • NORTEK INC has improved earnings per share by 43.9% in the most recent quarter compared to the same quarter a year ago. This company has reported somewhat volatile earnings recently. But, we feel it is poised for EPS growth in the coming year. During the past fiscal year, NORTEK INC swung to a loss, reporting -$0.56 versus $0.59 in the prior year. This year, the market expects an improvement in earnings ($2.94 versus -$0.56).
  • Net operating cash flow has significantly decreased to -$52.40 million or 261.37% when compared to the same quarter last year. In addition, when comparing to the industry average, the firm's growth rate is much lower.
  • The debt-to-equity ratio is very high at 13.07 and currently higher than the industry average, implying increased risk associated with the management of debt levels within the company. Along with the unfavorable debt-to-equity ratio, NTK maintains a poor quick ratio of 0.78, which illustrates the inability to avoid short-term cash problems.

You can view the full analysis from the report here: Nortek Ratings Report

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At the close, China Recycling Energy ( CREG) was down $0.08 (2.4%) to $3.30 on light volume. Throughout the day, 137,099 shares of China Recycling Energy exchanged hands as compared to its average daily volume of 418,700 shares. The stock ranged in price between $3.18-$3.45 after having opened the day at $3.33 as compared to the previous trading day's close of $3.38.

China Recycling Energy Corporation is engaged in the recycling energy business primarily in the People's Republic of China. China Recycling Energy has a market cap of $199.3 million and is part of the industrial goods sector. Shares are down 1.7% year-to-date as of the close of trading on Monday.

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TheStreet Ratings rates China Recycling Energy as a hold. The company's strengths can be seen in multiple areas, such as its robust revenue growth, solid stock price performance and compelling growth in net income. However, as a counter to these strengths, we find that we feel that the company's cash flow from its operations has been weak overall.

Highlights from TheStreet Ratings analysis on CREG go as follows:

  • CREG's very impressive revenue growth greatly exceeded the industry average of 3.8%. Since the same quarter one year prior, revenues leaped by 333.1%. This growth in revenue appears to have trickled down to the company's bottom line, improving the earnings per share.
  • Powered by its strong earnings growth of 133.33% and other important driving factors, this stock has surged by 210.10% over the past year, outperforming the rise in the S&P 500 Index during the same period. Regarding the stock's future course, our hold rating indicates that we do not recommend additional investment in this stock despite its gains in the past year.
  • The debt-to-equity ratio is somewhat low, currently at 0.69, and is less than that of the industry average, implying that there has been a relatively successful effort in the management of debt levels. Despite the fact that CREG's debt-to-equity ratio is low, the quick ratio, which is currently 0.70, displays a potential problem in covering short-term cash needs.
  • Current return on equity exceeded its ROE from the same quarter one year prior. This is a clear sign of strength within the company. When compared to other companies in the Commercial Services & Supplies industry and the overall market, CHINA RECYCLING ENERGY CORP's return on equity is below that of both the industry average and the S&P 500.
  • Net operating cash flow has significantly decreased to -$8.73 million or 69.41% when compared to the same quarter last year. In addition, when comparing to the industry average, the firm's growth rate is much lower.

You can view the full analysis from the report here: China Recycling Energy Ratings Report

STOCKS TO BUY: TheStreet Quant Ratings has identified a handful of stocks that can potentially TRIPLE in the next 12 months. Learn more.

Industrial Services of America ( IDSA) was another company that pushed the Materials & Construction industry lower today. Industrial Services of America was down $0.15 (3.0%) to $4.77 on light volume. Throughout the day, 3,282 shares of Industrial Services of America exchanged hands as compared to its average daily volume of 14,300 shares. The stock ranged in price between $4.75-$4.86 after having opened the day at $4.86 as compared to the previous trading day's close of $4.92.

Industrial Services of America, Inc. operates as a recycler of stainless steel, ferrous, and non-ferrous scrap. The company operates in two segments, Recycling and Waste Services. Industrial Services of America has a market cap of $34.0 million and is part of the industrial goods sector. Shares are up 55.2% year-to-date as of the close of trading on Monday.

TheStreet Ratings rates Industrial Services of America as a sell. The company's weaknesses can be seen in multiple areas, such as its feeble growth in its earnings per share, deteriorating net income, disappointing return on equity and poor profit margins.

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Highlights from TheStreet Ratings analysis on IDSA go as follows:

  • INDUSTRIAL SERVICES AMER INC has experienced a steep decline in earnings per share in the most recent quarter in comparison to its performance from the same quarter a year ago. The company has reported a trend of declining earnings per share over the past two years. During the past fiscal year, INDUSTRIAL SERVICES AMER INC reported poor results of -$1.96 versus -$0.96 in the prior year.
  • The company, on the basis of change in net income from the same quarter one year ago, has significantly underperformed when compared to that of the S&P 500 and the Commercial Services & Supplies industry. The net income has significantly decreased by 128.1% when compared to the same quarter one year ago, falling from -$4.50 million to -$10.27 million.
  • Return on equity has greatly decreased when compared to its ROE from the same quarter one year prior. This is a signal of major weakness within the corporation. Compared to other companies in the Commercial Services & Supplies industry and the overall market, INDUSTRIAL SERVICES AMER INC's return on equity significantly trails that of both the industry average and the S&P 500.
  • The gross profit margin for INDUSTRIAL SERVICES AMER INC is currently extremely low, coming in at 0.11%. It has decreased from the same quarter the previous year. Along with this, the net profit margin of -35.96% is significantly below that of the industry average.
  • IDSA, with its decline in revenue, underperformed when compared the industry average of 3.8%. Since the same quarter one year prior, revenues fell by 22.8%. Weakness in the company's revenue seems to have hurt the bottom line, decreasing earnings per share.

You can view the full analysis from the report here: Industrial Services of America Ratings Report

STOCKS TO BUY: TheStreet Quant Ratings has identified a handful of stocks that can potentially TRIPLE in the next 12 months. Learn more.

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