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 was unchanged today versus the S&P 500, which was up 0.2%. Laggards within the Basic Materials sector included Sonde Resources ( SOQ), down 12.5%, Barnwell Industries ( BRN), down 3.3%, Pacific Booker Minerals ( PBM), down 6.2%, Ossen Innovation ( OSN), down 5.7% and Sutor Technology Group ( SUTR), down 11.5%.

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

Sutor Technology Group ( SUTR) is one of the companies that pushed the Basic Materials sector lower today. Sutor Technology Group was down $0.10 (11.5%) to $0.75 on heavy volume. Throughout the day, 460,913 shares of Sutor Technology Group exchanged hands as compared to its average daily volume of 49,900 shares. The stock ranged in price between $0.71-$0.82 after having opened the day at $0.82 as compared to the previous trading day's close of $0.85.

Sutor Technology Group Limited, through its subsidiaries, manufactures and sells finished steel products in the People's Republic of China. Sutor Technology Group has a market cap of $35.9 million and is part of the energy industry. Shares are down 53.5% year-to-date as of the close of trading on Tuesday.

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TheStreet Ratings rates Sutor Technology Group as a hold. The company's strengths can be seen in multiple areas, such as its attractive valuation levels, good cash flow from operations 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 SUTR go as follows:

  • Net operating cash flow has significantly increased by 196.77% to $16.29 million when compared to the same quarter last year. In addition, SUTOR TECHNOLOGY GROUP LTD has also vastly surpassed the industry average cash flow growth rate of -23.48%.
  • The return on equity has improved slightly when compared to the same quarter one year prior. This can be construed as a modest strength in the organization. Compared to other companies in the Metals & Mining industry and the overall market on the basis of return on equity, SUTOR TECHNOLOGY GROUP LTD has outperformed in comparison with the industry average, but has underperformed when compared to that of the S&P 500.
  • The gross profit margin for SUTOR TECHNOLOGY GROUP LTD is currently extremely low, coming in at 9.97%. Regardless of SUTR's low profit margin, it has managed to increase from the same period last year. Despite the mixed results of the gross profit margin, SUTR's net profit margin of 1.15% is significantly lower than the industry average.
  • 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 Metals & Mining industry. The net income has significantly decreased by 71.3% when compared to the same quarter one year ago, falling from $3.88 million to $1.11 million.

You can view the full analysis from the report here: Sutor Technology Group Ratings Report

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At the close, Ossen Innovation ( OSN) was down $0.05 (5.7%) to $0.83 on average volume. Throughout the day, 22,132 shares of Ossen Innovation exchanged hands as compared to its average daily volume of 25,300 shares. The stock ranged in price between $0.82-$0.86 after having opened the day at $0.86 as compared to the previous trading day's close of $0.88.

Ossen Innovation Co., Ltd. manufactures and sells various plain surface prestressed steel materials, and rare earth coated and zinc coated prestressed steel materials in the People's Republic of China. Ossen Innovation has a market cap of $17.1 million and is part of the energy industry. Shares are down 27.7% year-to-date as of the close of trading on Tuesday.

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TheStreet Ratings rates Ossen Innovation as a hold. The company's strengths can be seen in multiple areas, such as its revenue growth, solid stock price performance and compelling growth in net income. 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 OSN go as follows:

  • OSN's very impressive revenue growth greatly exceeded the industry average of 3.2%. Since the same quarter one year prior, revenues leaped by 92.1%. This growth in revenue appears to have trickled down to the company's bottom line, improving the earnings per share.
  • This stock has managed to rise its share value by 40.62% over the past twelve months. Regarding the stock's future course, our hold rating indicates that we do not recommend additional investment in this stock despite its gains in the past year.
  • The return on equity has improved slightly when compared to the same quarter one year prior. This can be construed as a modest strength in the organization. Compared to other companies in the Metals & Mining industry and the overall market on the basis of return on equity, OSSEN INNOVATION CO LTD -ADR has outperformed in comparison with the industry average, but has underperformed when compared to that of the S&P 500.
  • The gross profit margin for OSSEN INNOVATION CO LTD -ADR is currently extremely low, coming in at 10.81%. It has decreased from the same quarter the previous year. Along with this, the net profit margin of 1.71% significantly trails the industry average.
  • Net operating cash flow has significantly decreased to -$1.13 million or 112.47% 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: Ossen Innovation 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.

Sonde Resources ( SOQ) was another company that pushed the Basic Materials sector lower today. Sonde Resources was down $0.03 (12.5%) to $0.21 on light volume. Throughout the day, 29,960 shares of Sonde Resources exchanged hands as compared to its average daily volume of 40,000 shares. The stock ranged in price between $0.20-$0.24 after having opened the day at $0.24 as compared to the previous trading day's close of $0.24.

Sonde Resources has a market cap of $11.5 million and is part of the energy industry. Shares are down 65.2% year-to-date as of the close of trading on Tuesday.

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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