3 Stocks Improving Performance Of The Materials & Construction Industry

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All three major indices traded up today with the Dow Jones Industrial Average ( ^DJI) trading up 94 points (0.6%) at 16,903 as of Wednesday, June 18, 2014, 3:55 PM ET. The NYSE advances/declines ratio sits at 1,336 issues advancing vs. 1,652 declining with 168 unchanged.

The Materials & Construction industry as a whole closed the day up 0.5% versus the S&P 500, which was up 0.7%. Top gainers within the Materials & Construction industry included Integrated Electrical Services ( IESC), up 2.1%, James Hardie Industries ( JHX), up 2.2%, Pure Cycle ( PCYO), up 4.3%, Abengoa ( ABGB), up 3.8% and Xinyuan Real Estate ( XIN), up 3.1%.

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

Pure Cycle ( PCYO) is one of the companies that pushed the Materials & Construction industry higher today. Pure Cycle was up $0.26 (4.3%) to $6.29 on average volume. Throughout the day, 99,042 shares of Pure Cycle exchanged hands as compared to its average daily volume of 68,300 shares. The stock ranged in a price between $5.98-$6.67 after having opened the day at $6.00 as compared to the previous trading day's close of $6.03.

Pure Cycle Corporation designs, constructs, operates, and maintains water and wastewater systems in the Denver metropolitan area. Pure Cycle has a market cap of $144.2 million and is part of the industrial goods sector. Shares are down 4.7% year-to-date as of the close of trading on Tuesday. Currently there is 1 analyst who rates Pure Cycle a buy, no analysts rate it a sell, and none rate it a hold.

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TheStreet Ratings rates Pure Cycle 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 impressive record of earnings per share growth. 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 PCYO go as follows:

  • PCYO's very impressive revenue growth greatly exceeded the industry average of 10.3%. Since the same quarter one year prior, revenues leaped by 69.0%. This growth in revenue appears to have trickled down to the company's bottom line, improving the earnings per share.
  • PCYO's debt-to-equity ratio is very low at 0.09 and is currently below that of the industry average, implying that there has been very successful management of debt levels. To add to this, PCYO has a quick ratio of 2.09, which demonstrates the ability of the company to cover short-term liquidity needs.
  • Compared to where it was 12 months ago, the stock is up, but it has so far lagged the appreciation in the S&P 500. 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.
  • The company's current return on equity greatly increased when compared to its ROE from the same quarter one year prior. This is a signal of significant strength within the corporation. Compared to other companies in the Water Utilities industry and the overall market, PURE CYCLE CORP's return on equity significantly trails that of both the industry average and the S&P 500.
  • Net operating cash flow has significantly decreased to -$1.44 million or 193.26% 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: Pure Cycle Ratings Report

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