3 Stocks Advancing The Basic Materials Sector

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 76 points (0.4%) at 17,077 as of Monday, Aug. 25, 2014, 4:20 PM ET. The NYSE advances/declines ratio sits at 1,872 issues advancing vs. 1,174 declining with 144 unchanged.

The Basic Materials sector as a whole closed the day up 0.2% versus the S&P 500, which was up 0.5%. Top gainers within the Basic Materials sector included Barnwell Industries ( BRN), up 2.1%, Ossen Innovation ( OSN), up 5.0%, Tengasco ( TGC), up 4.4%, Metabolix ( MBLX), up 2.3% and KiOR ( KIOR), up 6.2%.

TheStreet Ratings Group would like to highlight 3 stocks pushing the sector higher today:

KiOR ( KIOR) is one of the companies that pushed the Basic Materials sector higher today. KiOR was up $0.01 (6.2%) to $0.11 on average volume. Throughout the day, 783,776 shares of KiOR exchanged hands as compared to its average daily volume of 783,400 shares. The stock ranged in a price between $0.10-$0.12 after having opened the day at $0.11 as compared to the previous trading day's close of $0.10.

KiOR, Inc., a renewable fuels company, produces and sells cellulosic gasoline and diesel from lignocellulosic biomass using its proprietary biomass-to-cellulosic fuel technology platform. KiOR has a market cap of $7.1 million and is part of the energy industry. Shares are down 93.8% year-to-date as of the close of trading on Friday. Currently there are no analysts who rate KiOR a buy, no analysts rate it a sell, and 1 rates it a hold.

STOCKS TO BUY: TheStreet Quant Ratings has identified a handful of stocks that can potentially TRIPLE in the next 12 months. Learn more.

TheStreet Ratings rates KiOR 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 KIOR go as follows:

  • KIOR's stock share price has done very poorly compared to where it was a year ago: Despite any rallies, the net result is that it is down by 95.69%, which is also worse that the performance of the S&P 500 Index. Investors have so far failed to pay much attention to the earnings improvements the company has managed to achieve over the last 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.
  • KIOR INC has improved earnings per share by 6.7% in the most recent quarter compared to the same quarter a year ago. 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, KIOR INC reported poor results of -$3.20 versus -$0.92 in the prior year. This year, the market expects an improvement in earnings (-$0.92 versus -$3.20).
  • 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 Oil, Gas & Consumable Fuels industry average. The net income increased by 2.4% when compared to the same quarter one year prior, going from -$31.34 million to -$30.59 million.
  • Net operating cash flow has increased to -$21.73 million or 14.83% when compared to the same quarter last year. The firm also exceeded the industry average cash flow growth rate of -6.15%.
  • The revenue growth greatly exceeded the industry average of 2.4%. Since the same quarter one year prior, revenues rose by 43.7%. This growth in revenue appears to have trickled down to the company's bottom line, improving the earnings per share.

You can view the full analysis from the report here: KiOR 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, Metabolix ( MBLX) was up $0.02 (2.3%) to $0.66 on average volume. Throughout the day, 93,591 shares of Metabolix exchanged hands as compared to its average daily volume of 95,800 shares. The stock ranged in a price between $0.59-$0.67 after having opened the day at $0.65 as compared to the previous trading day's close of $0.64.

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 $22.8 million and is part of the energy industry. Shares are down 48.8% year-to-date as of the close of trading on Friday. Currently there are no analysts who rate Metabolix a buy, no analysts rate it a sell, and 2 rate it a hold.

STOCKS TO BUY: TheStreet Quant Ratings has identified a handful of stocks that can potentially TRIPLE in the next 12 months. Learn more.

TheStreet Ratings rates Metabolix as a sell. The company's weaknesses can be seen in multiple areas, such as its disappointing return on equity and generally disappointing historical performance in the stock itself.

Highlights from TheStreet Ratings analysis on MBLX go as follows:

  • 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.
  • MBLX's stock share price has done very poorly compared to where it was a year ago: Despite any rallies, the net result is that it is down by 52.22%, which is also worse that the performance of the S&P 500 Index. Investors have so far failed to pay much attention to the earnings improvements the company has managed to achieve over the last 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.
  • The revenue fell significantly faster than the industry average of 7.8%. Since the same quarter one year prior, revenues fell by 31.4%. The declining revenue has not hurt the company's bottom line, with increasing earnings per share.
  • METABOLIX INC has improved earnings per share by 8.7% in the most recent quarter compared to the same quarter a year ago. 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, 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 (-$0.83 versus -$0.88).
  • The net income growth from the same quarter one year ago has exceeded that of the S&P 500 and the Chemicals industry average. The net income increased by 8.0% when compared to the same quarter one year prior, going from -$7.87 million to -$7.24 million.

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.

Ossen Innovation ( OSN) was another company that pushed the Basic Materials sector higher today. Ossen Innovation was up $0.04 (5.0%) to $0.84 on heavy volume. Throughout the day, 51,524 shares of Ossen Innovation exchanged hands as compared to its average daily volume of 24,800 shares. The stock ranged in a price between $0.82-$0.90 after having opened the day at $0.84 as compared to the previous trading day's close of $0.80.

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 $16.5 million and is part of the energy industry. Shares are down 32.8% year-to-date as of the close of trading on Friday. Currently there are no analysts who rate Ossen Innovation a buy, no analysts rate it a sell, and none rate it a hold.

TheStreet Ratings rates Ossen Innovation as a hold. The company's strengths can be seen in multiple areas, such as its revenue growth, increase in stock price during the past year and attractive valuation levels. 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 4.0%. 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 19.02% over the past twelve months. Despite the fact that it has already risen in the past year, there is currently no conclusive evidence that warrants the purchase or sale of this stock.
  • 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.

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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