3 Stocks Pushing The Basic Materials Sector 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 Basic Materials sector as a whole closed the day up 0.4% versus the S&P 500, which was up 0.5%. Laggards within the Basic Materials sector included Timberline Resources ( TLR), down 6.8%, Pacific Booker Minerals ( PBM), down 10.2%, Lilis Energy ( LLEX), down 9.9%, Alderon Iron Ore ( AXX), down 1.6% and Houston American Energy ( HUSA), down 7.8%.

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

Houston American Energy ( HUSA) is one of the companies that pushed the Basic Materials sector lower today. Houston American Energy was down $0.02 (7.8%) to $0.23 on average volume. Throughout the day, 173,758 shares of Houston American Energy exchanged hands as compared to its average daily volume of 217,100 shares. The stock ranged in price between $0.23-$0.25 after having opened the day at $0.24 as compared to the previous trading day's close of $0.25.

Houston American Energy Corp., an independent energy company, explores for, develops, and produces natural gas, crude oil, and condensate from properties located principally in the Gulf Coast area of the United States and South America. Houston American Energy has a market cap of $12.5 million and is part of the metals & mining industry. Shares are down 0.1% year-to-date as of the close of trading on Monday.

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TheStreet Ratings rates Houston American Energy as a sell. Among the areas we feel are negative, one of the most important has been a generally disappointing historical performance in the stock itself.

Highlights from TheStreet Ratings analysis on HUSA go as follows:

  • HUSA has underperformed the S&P 500 Index, declining 24.14% from its price level of one year ago. The fact that the stock is now selling for less than others in its industry in relation to its current earnings is not reason enough to justify a buy rating at this time.
  • 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 Oil, Gas & Consumable Fuels industry and the overall market, HOUSTON AMERN ENERGY CORP's return on equity significantly trails that of both the industry average and the S&P 500.
  • The gross profit margin for HOUSTON AMERN ENERGY CORP is currently very high, coming in at 74.53%. It has increased significantly from the same period last year. Regardless of the strong results of the gross profit margin, the net profit margin of -504.71% is in-line with the industry average.
  • Net operating cash flow has increased to -$0.70 million or 19.70% when compared to the same quarter last year. The firm also exceeded the industry average cash flow growth rate of -6.58%.
  • HUSA 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 35.70, which clearly demonstrates the ability to cover short-term cash needs.

You can view the full analysis from the report here: Houston American Energy Ratings Report

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At the close, Alderon Iron Ore ( AXX) was down $0.02 (1.6%) to $1.22 on light volume. Throughout the day, 12,525 shares of Alderon Iron Ore exchanged hands as compared to its average daily volume of 42,300 shares. The stock ranged in price between $1.22-$1.24 after having opened the day at $1.23 as compared to the previous trading day's close of $1.24.

Alderon Iron Ore has a market cap of $160.1 million and is part of the metals & mining industry. Shares are down 21.7% year-to-date as of the close of trading on Monday. Currently there are 3 analysts who rate Alderon Iron Ore a buy, no analysts rate it a sell, and none rate it a hold.

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Timberline Resources ( TLR) was another company that pushed the Basic Materials sector lower today. Timberline Resources was down $0.01 (6.8%) to $0.11 on heavy volume. Throughout the day, 579,250 shares of Timberline Resources exchanged hands as compared to its average daily volume of 119,100 shares. The stock ranged in price between $0.11-$0.12 after having opened the day at $0.12 as compared to the previous trading day's close of $0.12.

Timberline Resources has a market cap of $9.4 million and is part of the metals & mining industry. Shares are down 32.6% year-to-date as of the close of trading on Monday.

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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