3 Stocks Pushing The Chemicals Industry Lower

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The Chemicals industry as a whole was unchanged today versus the S&P 500, which was unchanged. Laggards within the Chemicals industry included Metabolix ( MBLX), down 4.4%, Methes Energies International ( MEIL), down 2.6%, Synthesis Energy Sys ( SYMX), down 3.5%, Penford ( PENX), down 8.6% and Gevo ( GEVO), down 1.8%.

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

Penford ( PENX) is one of the companies that pushed the Chemicals industry lower today. Penford was down $1.18 (8.6%) to $12.57 on heavy volume. Throughout the day, 92,016 shares of Penford exchanged hands as compared to its average daily volume of 50,800 shares. The stock ranged in price between $12.48-$13.71 after having opened the day at $13.60 as compared to the previous trading day's close of $13.75.

Penford Corporation, together with its subsidiaries, develops, manufactures, and markets specialty natural-based ingredient systems for food and industrial applications primarily in the United States. Penford has a market cap of $161.0 million and is part of the basic materials sector. Shares are up 7.0% year-to-date as of the close of trading on Tuesday. Currently there are no analysts who rate Penford a buy, no analysts rate it a sell, and 1 rates it a hold.

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TheStreet Ratings rates Penford as a hold. The company's strengths can be seen in multiple areas, such as its increase in net income, good cash flow from operations and largely solid financial position with reasonable debt levels by most measures. However, as a counter to these strengths, we also find weaknesses including a generally disappointing performance in the stock itself and poor profit margins.

Highlights from TheStreet Ratings analysis on PENX go as follows:

  • The net income growth from the same quarter one year ago has significantly exceeded that of the Chemicals industry average, but is less than that of the S&P 500. The net income increased by 4.1% when compared to the same quarter one year prior, going from $1.19 million to $1.24 million.
  • Net operating cash flow has significantly increased by 92.12% to -$0.28 million when compared to the same quarter last year. In addition, PENFORD CORP has also vastly surpassed the industry average cash flow growth rate of -1.65%.
  • PENFORD CORP reported flat earnings per share in the most recent quarter. 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, PENFORD CORP turned its bottom line around by earning $0.32 versus -$0.77 in the prior year. This year, the market expects an improvement in earnings ($0.55 versus $0.32).
  • The gross profit margin for PENFORD CORP is currently extremely low, coming in at 14.59%. Regardless of PENX's low profit margin, it has managed to increase from the same period last year. Despite the mixed results of the gross profit margin, PENX's net profit margin of 1.16% is significantly lower than the industry average.
  • PENX has underperformed the S&P 500 Index, declining 17.58% from its price level of one year ago. Looking ahead, other than the push or pull of the broad market, we do not see anything in the company's numbers that may help reverse the decline experienced over the past 12 months. Despite the past decline, the stock is still selling for more than most others in its industry.

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

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At the close, Synthesis Energy Sys ( SYMX) was down $0.06 (3.5%) to $1.67 on average volume. Throughout the day, 358,282 shares of Synthesis Energy Sys exchanged hands as compared to its average daily volume of 384,900 shares. The stock ranged in price between $1.65-$1.79 after having opened the day at $1.68 as compared to the previous trading day's close of $1.73.

Synthesis Energy Systems, Inc., a development stage energy and gasification technology company, provides various proprietary gasification technology systems and solutions to the energy and chemical industries worldwide. Synthesis Energy Sys has a market cap of $136.9 million and is part of the basic materials sector. Shares are up 188.3% year-to-date as of the close of trading on Tuesday.

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TheStreet Ratings rates Synthesis Energy Sys as a sell. The area that we feel has been the company's primary weakness has been its unimpressive growth in net income.

Highlights from TheStreet Ratings analysis on SYMX go as follows:

  • The company, on the basis of net income growth from the same quarter one year ago, has underperformed when compared to that of the S&P 500 and greatly underperformed compared to the Energy Equipment & Services industry average. The net income increased by 22.8% when compared to the same quarter one year prior, going from -$5.38 million to -$4.15 million.
  • Current return on equity exceeded its ROE from the same quarter one year prior. This is a clear sign of strength within the company. Compared to other companies in the Energy Equipment & Services industry and the overall market, SYNTHESIS ENERGY SYSTEMS INC's return on equity significantly trails that of both the industry average and the S&P 500.
  • Net operating cash flow has increased to -$2.82 million or 27.52% when compared to the same quarter last year. Despite an increase in cash flow, SYNTHESIS ENERGY SYSTEMS INC's cash flow growth rate is still lower than the industry average growth rate of 49.49%.
  • SYNTHESIS ENERGY SYSTEMS INC has improved earnings per share by 33.3% 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, SYNTHESIS ENERGY SYSTEMS INC continued to lose money by earning -$0.34 versus -$0.40 in the prior year.
  • This stock has increased by 83.03% over the past year, outperforming the rise in the S&P 500 Index during the same period. Regarding the future course of this stock, we feel that the risks involved in investing in SYMX do not compensate for any future upside potential, despite the fact that it has seen nice gains over the past 12 months.

You can view the full analysis from the report here: Synthesis Energy Sys Ratings Report

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Metabolix ( MBLX) was another company that pushed the Chemicals industry lower today. Metabolix was down $0.04 (4.4%) to $0.86 on average volume. Throughout the day, 54,371 shares of Metabolix exchanged hands as compared to its average daily volume of 71,200 shares. The stock ranged in price between $0.84-$0.90 after having opened the day at $0.89 as compared to the previous trading day's close of $0.90.

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 $30.4 million and is part of the basic materials sector. Shares are down 28.6% 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.

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.

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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 conjunction, when comparing current results to the industry average, METABOLIX INC has marginally lower results.
  • 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 33.34%, 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.

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