3 Stocks Pushing The Materials & Construction Industry Lower

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.

The Materials & Construction industry as a whole closed the day up 0.4% versus the S&P 500, which was up 0.2%. Laggards within the Materials & Construction industry included TRC Companies ( TRR), down 1.8%, United States Lime & Minerals ( USLM), down 2.2%, Ply Gem Holdings ( PGEM), down 1.8%, Layne Christensen ( LAYN), down 4.5% and AAON ( AAON), down 3.1%.

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

Layne Christensen ( LAYN) is one of the companies that pushed the Materials & Construction industry lower today. Layne Christensen was down $0.51 (4.5%) to $10.81 on heavy volume. Throughout the day, 600,819 shares of Layne Christensen exchanged hands as compared to its average daily volume of 203,000 shares. The stock ranged in price between $10.45-$11.49 after having opened the day at $11.39 as compared to the previous trading day's close of $11.32.

Layne Christensen Company provides water management, construction, and drilling services in North America and internationally. Layne Christensen has a market cap of $245.7 million and is part of the industrial goods sector. Shares are down 33.7% year-to-date as of the close of trading on Tuesday. Currently there are no analysts who rate Layne Christensen a buy, no analysts rate it a sell, and 4 rate it a hold.

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TheStreet Ratings rates Layne Christensen as a sell. The company's weaknesses can be seen in multiple areas, such as its deteriorating net income, disappointing return on equity, poor profit margins, weak operating cash flow and generally disappointing historical performance in the stock itself.

Highlights from TheStreet Ratings analysis on LAYN go as follows:

  • The company, on the basis of change in net income from the same quarter one year ago, has underperformed when compared to that of the S&P 500 and the Construction & Engineering industry average. The net income has decreased by 16.6% when compared to the same quarter one year ago, dropping from -$23.78 million to -$27.73 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 Construction & Engineering industry and the overall market, LAYNE CHRISTENSEN CO's return on equity significantly trails that of both the industry average and the S&P 500.
  • The gross profit margin for LAYNE CHRISTENSEN CO is rather low; currently it is at 15.21%. It has decreased from the same quarter the previous year. Along with this, the net profit margin of -14.49% is significantly below that of the industry average.
  • Net operating cash flow has significantly decreased to -$12.69 million or 217.48% when compared to the same quarter last year. In addition, when comparing to the industry average, the firm's growth rate is much lower.
  • Looking at the price performance of LAYN's shares over the past 12 months, there is not much good news to report: the stock is down 41.16%, 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.

You can view the full analysis from the report here: Layne Christensen 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, Ply Gem Holdings ( PGEM) was down $0.18 (1.8%) to $9.61 on light volume. Throughout the day, 119,449 shares of Ply Gem Holdings exchanged hands as compared to its average daily volume of 176,200 shares. The stock ranged in price between $9.60-$9.85 after having opened the day at $9.78 as compared to the previous trading day's close of $9.79.

Ply Gem Holdings has a market cap of $645.2 million and is part of the industrial goods sector. Shares are down 45.7% year-to-date as of the close of trading on Tuesday. Currently there is 1 analyst who rates Ply Gem Holdings a buy, no analysts rate it a sell, and 3 rate it a hold.

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Highlights from TheStreet Ratings analysis on PGEM go as follows:

You can view the full analysis from the report here: Ply Gem Holdings 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.

TRC Companies ( TRR) was another company that pushed the Materials & Construction industry lower today. TRC Companies was down $0.10 (1.8%) to $5.44 on light volume. Throughout the day, 3,426 shares of TRC Companies exchanged hands as compared to its average daily volume of 74,200 shares. The stock ranged in price between $5.43-$5.53 after having opened the day at $5.53 as compared to the previous trading day's close of $5.54.

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 industrial goods sector. Shares are down 22.4% year-to-date as of the close of trading on Tuesday.

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.

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Highlights from TheStreet Ratings analysis on TRR go as follows:

  • TRR's revenue growth has slightly outpaced the industry average of 4.3%. 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.

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