3 Chemicals Stocks Pushing Industry Growth

Editor's Note: Any reference to TheStreet Ratings and its underlying recommendation does not reflect the opinion of TheStreet, Inc. or any of its contributors including Jim Cramer or Stephanie Link.

All three major indices traded up today with the Dow Jones Industrial Average ( ^DJI) trading up 27 points (0.2%) at 16,518 as of Monday, May 19, 2014, 3:55 PM ET. The NYSE advances/declines ratio sits at 1,874 issues advancing vs. 1,111 declining with 157 unchanged.

The Chemicals industry as a whole closed the day up 0.5% versus the S&P 500, which was up 0.4%. Top gainers within the Chemicals industry included Flexible Solutions International ( FSI), up 2.9%, Methes Energies International ( MEIL), up 2.5%, Gulf Resources ( GURE), up 4.8%, Taminco ( TAM), up 2.2% and Senomyx ( SNMX), up 11.0%.

TheStreet Ratings Group would like to highlight 3 stocks pushing the industry higher today:

Taminco ( TAM) is one of the companies that pushed the Chemicals industry higher today. Taminco was up $0.45 (2.2%) to $20.45 on light volume. Throughout the day, 23,858 shares of Taminco exchanged hands as compared to its average daily volume of 107,000 shares. The stock ranged in a price between $19.88-$20.77 after having opened the day at $19.91 as compared to the previous trading day's close of $20.00.

Taminco has a market cap of $1.3 billion and is part of the basic materials sector. Shares are down 1.0% year-to-date as of the close of trading on Friday.

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Highlights from TheStreet Ratings analysis on TAM go as follows:

You can view the full analysis from the report here: Taminco 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.

At the close, Gulf Resources ( GURE) was up $0.10 (4.8%) to $2.19 on light volume. Throughout the day, 150,662 shares of Gulf Resources exchanged hands as compared to its average daily volume of 287,200 shares. The stock ranged in a price between $2.09-$2.20 after having opened the day at $2.09 as compared to the previous trading day's close of $2.09.

Gulf Resources, Inc., together with its subsidiaries, manufactures and trades in bromine and crude salt products in the People's Republic of China. It operates in three segments: Bromine, Crude Salt, and Chemical Products. Gulf Resources has a market cap of $78.6 million and is part of the basic materials sector. Shares are down 13.6% year-to-date as of the close of trading on Friday. Currently there are no analysts who rate Gulf Resources a buy, no analysts rate it a sell, and none rate it a hold.

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

TheStreet Ratings rates Gulf Resources as a hold. The company's strengths can be seen in multiple areas, such as its robust revenue growth, largely solid financial position with reasonable debt levels by most measures and solid stock price performance. 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 GURE go as follows:

  • The revenue growth came in higher than the industry average of 11.3%. Since the same quarter one year prior, revenues rose by 36.5%. This growth in revenue appears to have trickled down to the company's bottom line, improving the earnings per share.
  • GURE's debt-to-equity ratio is very low at 0.01 and is currently below that of the industry average, implying that there has been very successful management of debt levels. Along with this, the company maintains a quick ratio of 13.51, which clearly demonstrates the ability to cover short-term cash needs.
  • GULF RESOURCES INC reported significant earnings per share improvement in the most recent quarter compared to the same quarter a year ago. The company has demonstrated a pattern of positive earnings per share growth over the past year. During the past fiscal year, GULF RESOURCES INC increased its bottom line by earning $0.54 versus $0.43 in the prior year.
  • The return on equity has improved slightly when compared to the same quarter one year prior. This can be construed as a modest strength in the organization. In comparison to the other companies in the Chemicals industry and the overall market, GULF RESOURCES INC's return on equity is significantly below that of the industry average and is below that of the S&P 500.
  • Net operating cash flow has decreased to $8.76 million or 37.51% 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: Gulf Resources 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.

Flexible Solutions International ( FSI) was another company that pushed the Chemicals industry higher today. Flexible Solutions International was up $0.02 (2.9%) to $0.70 on light volume. Throughout the day, 3,300 shares of Flexible Solutions International exchanged hands as compared to its average daily volume of 34,800 shares. The stock ranged in a price between $0.67-$0.70 after having opened the day at $0.69 as compared to the previous trading day's close of $0.68.

Flexible Solutions International, Inc., together with its subsidiaries, develops, manufactures, and markets specialty chemicals that slow the evaporation of water. Flexible Solutions International has a market cap of $8.2 million and is part of the basic materials sector. Shares are down 35.5% year-to-date as of the close of trading on Friday. Currently there are no analysts who rate Flexible Solutions International a buy, no analysts rate it a sell, and 1 rates it a hold.

TheStreet Ratings rates Flexible Solutions International as a sell. The company's weaknesses can be seen in multiple areas, such as its unimpressive growth in net income and feeble growth in its earnings per share.

Highlights from TheStreet Ratings analysis on FSI go as follows:

  • 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 Chemicals industry. The net income has significantly decreased by 340.0% when compared to the same quarter one year ago, falling from $0.07 million to -$0.16 million.
  • FLEXIBLE SOLUTIONS INTL INC's earnings have gone downhill when comparing its most recently reported quarter with the same quarter a year earlier. This company has reported somewhat volatile earnings recently. We feel it is likely to report a decline in earnings in the coming year. During the past fiscal year, FLEXIBLE SOLUTIONS INTL INC turned its bottom line around by earning $0.14 versus -$0.08 in the prior year. For the next year, the market is expecting a contraction of 92.8% in earnings ($0.01 versus $0.14).
  • This stock's share value has moved by only 36.19% over the past year. Naturally, the overall market trend is bound to be a significant factor. However, in one sense, the stock's sharp decline last year is a positive for future investors, making it cheaper (in proportion to its earnings over the past year) than most other stocks in its industry. But due to other concerns, we feel the stock is still not a good buy right now.
  • FSI, with its decline in revenue, underperformed when compared the industry average of 11.3%. Since the same quarter one year prior, revenues fell by 15.4%. The declining revenue appears to have seeped down to the company's bottom line, decreasing earnings per share.

You can view the full analysis from the report here: Flexible Solutions International 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.

Editor's Note: Any reference to TheStreet Ratings and its underlying recommendation does not reflect the opinion of TheStreet, Inc. or any of its contributors including Jim Cramer or Stephanie Link.

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