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 are trading down today with the Dow Jones Industrial Average ( ^DJI) trading down 101.30 points (-0.6%) at 16,845 as of Wednesday, June 11, 2014, 3:55 PM ET. The NYSE advances/declines ratio sits at 997 issues advancing vs. 1,977 declining with 159 unchanged.

The Chemicals industry as a whole closed the day up 0.3% versus the S&P 500, which was down 0.3%. Top gainers within the Chemicals industry included Flexible Solutions International ( FSI), up 9.9%, Metabolix ( MBLX), up 4.6%, Lightbridge ( LTBR), up 3.4%, Ceres ( CERE), up 8.7% and Synthesis Energy Sys ( SYMX), up 6.2%.

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

Ceres ( CERE) is one of the companies that pushed the Chemicals industry higher today. Ceres was up $0.06 (8.7%) to $0.71 on heavy volume. Throughout the day, 830,764 shares of Ceres exchanged hands as compared to its average daily volume of 434,300 shares. The stock ranged in a price between $0.66-$0.74 after having opened the day at $0.68 as compared to the previous trading day's close of $0.65.

Ceres, Inc., an agricultural biotechnology company, develops and sells energy crops to produce renewable bioenergy feedstocks in North America. Ceres has a market cap of $30.9 million and is part of the basic materials sector. Shares are down 52.8% year-to-date as of the close of trading on Tuesday. Currently there are 2 analysts who rate Ceres a buy, no analysts rate it a sell, and none rate it a hold.

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TheStreet Ratings rates Ceres as a sell. The company's weaknesses can be seen in multiple areas, such as its disappointing return on equity and generally disappointing historical performance in the stock itself.

Highlights from TheStreet Ratings analysis on CERE go as follows:

  • 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 Oil, Gas & Consumable Fuels industry and the overall market, CERES INC's return on equity significantly trails that of both the industry average and the S&P 500.
  • CERE's stock share price has done very poorly compared to where it was a year ago: Despite any rallies, the net result is that it is down by 69.05%, which is also worse that the performance of the S&P 500 Index. Investors have so far failed to pay much attention to the earnings improvements the company has managed to achieve over the last quarter. 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.
  • CERE, with its very weak revenue results, has greatly underperformed against the industry average of 3.1%. Since the same quarter one year prior, revenues plummeted by 51.7%. The declining revenue has not hurt the company's bottom line, with increasing earnings per share.
  • CERES INC has improved earnings per share by 19.4% 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, CERES INC reported poor results of -$1.31 versus -$1.22 in the prior year. This year, the market expects an improvement in earnings (-$0.90 versus -$1.31).
  • The net income growth from the same quarter one year ago has significantly exceeded that of the Oil, Gas & Consumable Fuels industry average, but is less than that of the S&P 500. The net income increased by 19.4% when compared to the same quarter one year prior, going from -$8.97 million to -$7.23 million.

You can view the full analysis from the report here: Ceres 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, Metabolix ( MBLX) was up $0.04 (4.6%) to $0.91 on light volume. Throughout the day, 41,523 shares of Metabolix exchanged hands as compared to its average daily volume of 102,200 shares. The stock ranged in a price between $0.87-$0.91 after having opened the day at $0.88 as compared to the previous trading day's close of $0.87.

Metabolix, Inc., a bioscience company, focuses on delivering sustainable solutions to the plastics and chemicals industries. It produces a family of biopolymers found in nature called polyhydroxyalkanoates, which occur naturally in living organisms and are chemically similar to polyesters. Metabolix has a market cap of $30.8 million and is part of the basic materials sector. Shares are down 30.9% year-to-date as of the close of trading on Tuesday. Currently there are no analysts who rate Metabolix a buy, no analysts rate it a sell, and 2 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 Metabolix as a sell. The company's weaknesses can be seen in multiple areas, such as its unimpressive growth in net income, disappointing return on equity, weak operating cash flow, generally disappointing historical performance in the stock itself and feeble growth in its earnings per share.

Highlights from TheStreet Ratings analysis on MBLX go as follows:

  • The company, on the basis of change in net income from the same quarter one year ago, has significantly underperformed against the S&P 500 and did not exceed that of the Chemicals industry. The net income has decreased by 20.6% when compared to the same quarter one year ago, dropping from -$6.76 million to -$8.15 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 Chemicals industry and the overall market, METABOLIX INC's return on equity significantly trails that of both the industry average and the S&P 500.
  • Net operating cash flow has declined marginally to -$8.97 million or 5.49% when compared to the same quarter last year. In addition, when comparing the cash generation rate to the industry average, the firm's growth is significantly lower.
  • Looking at the price performance of MBLX's shares over the past 12 months, there is not much good news to report: the stock is down 45.20%, and it has underformed the S&P 500 Index. In addition, the company's earnings per share are lower today than the year-earlier quarter. 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.
  • METABOLIX INC's earnings per share declined by 15.0% in the most recent quarter compared to the same quarter a year ago. The company has reported a trend of declining earnings per share over the past year. However, the consensus estimate suggests that this trend should reverse in the coming year. During the past fiscal year, METABOLIX INC swung to a loss, reporting -$0.88 versus $0.10 in the prior year. This year, the market expects an improvement in earnings (-$0.84 versus -$0.88).

You can view the full analysis from the report here: Metabolix 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 $0.07 (9.9%) to $0.77 on heavy volume. Throughout the day, 58,495 shares of Flexible Solutions International exchanged hands as compared to its average daily volume of 14,900 shares. The stock ranged in a price between $0.66-$0.77 after having opened the day at $0.73 as compared to the previous trading day's close of $0.70.

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 $8.1 million and is part of the basic materials sector. Shares are down 27.1% year-to-date as of the close of trading on Tuesday. 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 100.0% in earnings ($0.00 versus $0.14).
  • This stock's share value has moved by only 25.88% 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 11.2%. 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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