3 Stocks Moving The Chemicals Industry Upward

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 16 points (0.1%) at 16,738 as of Wednesday, June 4, 2014, 3:55 PM ET. The NYSE advances/declines ratio sits at 1,467 issues advancing vs. 1,547 declining with 149 unchanged.

The Chemicals industry as a whole closed the day up 0.1% versus the S&P 500, which was up 0.2%. Top gainers within the Chemicals industry included Valhi ( VHI), up 2.8%, Amyris ( AMRS), up 2.9%, A Schulman ( SHLM), up 2.8% and Senomyx ( SNMX), up 5.8%.

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

A Schulman ( SHLM) is one of the companies that pushed the Chemicals industry higher today. A Schulman was up $0.97 (2.8%) to $35.13 on average volume. Throughout the day, 170,355 shares of A Schulman exchanged hands as compared to its average daily volume of 128,900 shares. The stock ranged in a price between $34.10-$35.49 after having opened the day at $34.14 as compared to the previous trading day's close of $34.16.

A. Schulman, Inc. supplies plastic compounds and resins for packaging, automotive, consumer products, and industrial applications. A Schulman has a market cap of $1.0 billion and is part of the basic materials sector. Shares are down 3.1% year-to-date as of the close of trading on Tuesday. Currently there is 1 analyst who rates A Schulman a buy, no analysts rate it a sell, and 2 rate it a hold.

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TheStreet Ratings rates A Schulman as a buy. The company's strengths can be seen in multiple areas, such as its revenue growth, largely solid financial position with reasonable debt levels by most measures and solid stock price performance. We feel these strengths outweigh the fact that the company has had sub par growth in net income.

Highlights from TheStreet Ratings analysis on SHLM go as follows:

  • SHLM's revenue growth has slightly outpaced the industry average of 11.3%. Since the same quarter one year prior, revenues rose by 14.2%. This growth in revenue does not appear to have trickled down to the company's bottom line, displayed by a decline in earnings per share.
  • The debt-to-equity ratio is somewhat low, currently at 0.60, and is less than that of the industry average, implying that there has been a relatively successful effort in the management of debt levels. Along with the favorable debt-to-equity ratio, the company maintains an adequate quick ratio of 1.13, which illustrates the ability to avoid short-term cash problems.
  • SCHULMAN (A.) INC's earnings per share declined by 46.3% in the most recent quarter compared to the same quarter a year ago. The company has suffered a declining pattern of earnings per share over the past two years. However, we anticipate this trend to reverse over the coming year. During the past fiscal year, SCHULMAN (A.) INC reported lower earnings of $1.11 versus $1.75 in the prior year. This year, the market expects an improvement in earnings ($2.28 versus $1.11).
  • Compared to where it was a year ago today, the stock is now trading at a higher level, regardless of the company's weak earnings results. The stock's price rise over the last year has driven it to a level which is somewhat expensive compared to the rest of its industry. We feel, however, that other strengths this company displays justify these higher price levels.
  • The gross profit margin for SCHULMAN (A.) INC is currently extremely low, coming in at 14.77%. Regardless of SHLM's low profit margin, it has managed to increase from the same period last year. Despite the mixed results of the gross profit margin, SHLM's net profit margin of 1.16% is significantly lower than the industry average.

You can view the full analysis from the report here: A Schulman 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, Amyris ( AMRS) was up $0.09 (2.9%) to $3.15 on light volume. Throughout the day, 99,081 shares of Amyris exchanged hands as compared to its average daily volume of 541,800 shares. The stock ranged in a price between $3.00-$3.19 after having opened the day at $3.02 as compared to the previous trading day's close of $3.06.

Amyris, Inc., a renewable products company, provides various alternatives to a range of petroleum-sourced products for the specialty chemical and transportation fuel markets worldwide. Amyris has a market cap of $254.0 million and is part of the basic materials sector. Shares are down 42.2% year-to-date as of the close of trading on Tuesday. Currently there are no analysts who rate Amyris a buy, no analysts rate it a sell, and 4 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 Amyris as a sell. The area that we feel has been the company's primary weakness has been its declining revenues.

Highlights from TheStreet Ratings analysis on AMRS go as follows:

  • AMRS, with its decline in revenue, underperformed when compared the industry average of 3.0%. Since the same quarter one year prior, revenues fell by 23.2%. The declining revenue has not hurt the company's bottom line, with increasing earnings per share.
  • The gross profit margin for AMYRIS INC is rather high; currently it is at 59.68%. It has increased significantly from the same period last year. Along with this, the net profit margin of 271.22% significantly outperformed against the industry average.
  • Net operating cash flow has significantly increased by 59.02% to -$9.95 million when compared to the same quarter last year. The firm also exceeded the industry average cash flow growth rate of 17.46%.
  • The stock has risen over the past year and, it has performed in line with the S&P 500 thus far. Turning our attention to the future direction of the stock, we do not believe this stock offers ample reward opportunity to compensate for the risks, despite the fact that it rose over the past year.
  • AMYRIS INC has improved earnings per share by 22.7% 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 two years. We feel that this trend should continue. This trend suggests that the performance of the business is improving. During the past fiscal year, AMYRIS INC continued to lose money by earning -$3.10 versus -$3.75 in the prior year. This year, the market expects an improvement in earnings (-$0.80 versus -$3.10).

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

Valhi ( VHI) was another company that pushed the Chemicals industry higher today. Valhi was up $0.16 (2.8%) to $5.72 on average volume. Throughout the day, 48,484 shares of Valhi exchanged hands as compared to its average daily volume of 47,000 shares. The stock ranged in a price between $5.57-$5.74 after having opened the day at $5.57 as compared to the previous trading day's close of $5.57.

Valhi, Inc., through its subsidiaries, operates in the chemicals, component products, and waste management businesses. Valhi has a market cap of $1.9 billion and is part of the basic materials sector. Shares are down 68.3% year-to-date as of the close of trading on Tuesday. Currently there are no analysts who rate Valhi a buy, 1 analyst rates it a sell, and none rate it a hold.

TheStreet Ratings rates Valhi as a hold. The company's strengths can be seen in multiple areas, such as its increase in net income and good cash flow from operations. However, as a counter to these strengths, we also find weaknesses including disappointing return on equity, poor profit margins and a generally disappointing performance in the stock itself.

Highlights from TheStreet Ratings analysis on VHI go as follows:

  • The net income growth from the same quarter one year ago has significantly exceeded that of the S&P 500 and the Chemicals industry. The net income increased by 102.0% when compared to the same quarter one year prior, rising from -$39.80 million to $0.80 million.
  • Net operating cash flow has significantly increased by 83.09% to -$5.80 million when compared to the same quarter last year. The firm also exceeded the industry average cash flow growth rate of 37.62%.
  • VALHI INC reported significant earnings per share improvement 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, VALHI INC swung to a loss, reporting -$0.29 versus $0.41 in the prior year. This year, the market expects an improvement in earnings ($0.10 versus -$0.29).
  • The gross profit margin for VALHI INC is rather low; currently it is at 22.77%. Despite the low profit margin, it has increased significantly from the same period last year. Despite the mixed results of the gross profit margin, VHI's net profit margin of 0.17% is significantly lower than the industry average.
  • 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 Chemicals industry and the overall market, VALHI INC's return on equity significantly trails that of both the industry average and the S&P 500.

You can view the full analysis from the report here: Valhi 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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