3 Materials & Construction Stocks Pushing The Industry Higher

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 115 points (0.7%) at 17,091 as of Friday, July 18, 2014, 3:55 PM ET. The NYSE advances/declines ratio sits at 2,387 issues advancing vs. 565 declining with 160 unchanged.

The Materials & Construction industry as a whole closed the day up 0.9% versus the S&P 500, which was up 1.0%. Top gainers within the Materials & Construction industry included Avalon Holdings ( AWX), up 2.6%, Skyline ( SKY), up 2.1%, Sharps Compliance ( SMED), up 1.9%, TRC Companies ( TRR), up 1.8% and Pure Cycle ( PCYO), up 5.9%.

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 $0.39 (5.9%) to $7.00 on light volume. Throughout the day, 35,861 shares of Pure Cycle exchanged hands as compared to its average daily volume of 105,400 shares. The stock ranged in a price between $6.57-$7.14 after having opened the day at $6.62 as compared to the previous trading day's close of $6.61.

Pure Cycle Corporation designs, constructs, operates, and maintains water and wastewater systems in the Denver metropolitan area. Pure Cycle has a market cap of $164.9 million and is part of the utilities sector. Shares are up 8.4% year-to-date as of the close of trading on Thursday. 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 increase in stock price during the past year. 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.
  • The gross profit margin for PURE CYCLE CORP is currently very high, coming in at 80.14%. It has increased from the same quarter the previous year. Regardless of the strong results of the gross profit margin, the net profit margin of -61.90% is in-line with the industry average.
  • 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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At the close, TRC Companies ( TRR) was up $0.10 (1.8%) to $5.81 on light volume. Throughout the day, 9,672 shares of TRC Companies exchanged hands as compared to its average daily volume of 74,200 shares. The stock ranged in a price between $5.64-$5.81 after having opened the day at $5.69 as compared to the previous trading day's close of $5.71.

TRC Companies, Inc. provides engineering, consulting, and construction management services in the United States. TRC Companies has a market cap of $176.5 million and is part of the utilities sector. Shares are down 20.0% year-to-date as of the close of trading on Thursday. Currently there are no analysts who rate TRC Companies a buy, no analysts rate it a sell, and none rate it a hold.

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TheStreet Ratings rates TRC Companies as a hold. 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 notable return on equity. However, as a counter to these strengths, we also find weaknesses including unimpressive growth in net income, poor profit margins and a generally disappointing performance in the stock itself.

Highlights from TheStreet Ratings analysis on TRR go as follows:

  • TRR's revenue growth has slightly outpaced the industry average of 4.4%. Since the same quarter one year prior, revenues rose by 10.0%. 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.
  • TRR's debt-to-equity ratio is very low at 0.02 and is currently below that of the industry average, implying that there has been very successful management of debt levels. Along with the favorable debt-to-equity ratio, the company maintains an adequate quick ratio of 1.40, which illustrates the ability to avoid short-term cash problems.
  • 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 Commercial Services & Supplies industry. The net income has significantly decreased by 53.9% when compared to the same quarter one year ago, falling from $3.10 million to $1.43 million.
  • The gross profit margin for TRC COS INC is currently extremely low, coming in at 6.58%. It has decreased from the same quarter the previous year. Along with this, the net profit margin of 1.18% trails that of the industry average.

You can view the full analysis from the report here: TRC Companies 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.

Sharps Compliance ( SMED) was another company that pushed the Materials & Construction industry higher today. Sharps Compliance was up $0.08 (1.9%) to $4.45 on light volume. Throughout the day, 10,428 shares of Sharps Compliance exchanged hands as compared to its average daily volume of 32,300 shares. The stock ranged in a price between $4.31-$4.45 after having opened the day at $4.38 as compared to the previous trading day's close of $4.37.

Sharps Compliance Corp. provides management solutions for medical waste, used healthcare materials, and unused dispensed medications in the United States. Sharps Compliance has a market cap of $66.4 million and is part of the utilities sector. Shares are down 8.0% year-to-date as of the close of trading on Thursday. Currently there are 3 analysts who rate Sharps Compliance a buy, no analysts rate it a sell, and none rate it a hold.

TheStreet Ratings rates Sharps Compliance as a hold. The company's strengths can be seen in multiple areas, such as its solid stock price performance, revenue growth and largely solid financial position with reasonable debt levels by most measures. However, as a counter to these strengths, we also find weaknesses including poor profit margins and weak operating cash flow.

Highlights from TheStreet Ratings analysis on SMED go as follows:

  • SMED's revenue growth trails the industry average of 16.9%. Since the same quarter one year prior, revenues slightly increased by 2.6%. This growth in revenue does not appear to have trickled down to the company's bottom line, displaying stagnant earnings per share.
  • SMED has no debt to speak of therefore resulting in a debt-to-equity ratio of zero, which we consider to be a relatively favorable sign. Along with this, the company maintains a quick ratio of 4.54, which clearly demonstrates the ability to cover short-term cash needs.
  • The net income growth from the same quarter one year ago has exceeded that of the S&P 500, but is less than that of the Health Care Providers & Services industry average. The net income increased by 2.1% when compared to the same quarter one year prior, going from -$0.96 million to -$0.94 million.
  • The gross profit margin for SHARPS COMPLIANCE CORP is currently lower than what is desirable, coming in at 28.26%. It has decreased from the same quarter the previous year. Along with this, the net profit margin of -16.84% is significantly below that of the industry average.
  • Net operating cash flow has significantly decreased to -$0.83 million or 59.88% 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: Sharps Compliance 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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