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 down 0.2% versus the S&P 500, which was down 0.2%. Laggards within the Materials & Construction industry included Abengoa ( ABGB), down 2.2%, Casella Waste Systems ( CWST), down 5.3%, Sterling Construction ( STRL), down 2.8%, Real Goods Solar ( RGSE), down 3.9% and Aspen Aerogels ( ASPN), down 3.4%.

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

Sterling Construction ( STRL) is one of the companies that pushed the Materials & Construction industry lower today. Sterling Construction was down $0.25 (2.8%) to $8.57 on average volume. Throughout the day, 57,422 shares of Sterling Construction exchanged hands as compared to its average daily volume of 75,500 shares. The stock ranged in price between $8.54-$8.82 after having opened the day at $8.79 as compared to the previous trading day's close of $8.82.

Sterling Construction Company, Inc. operates as a heavy civil construction company in Texas, Utah, Nevada, Arizona, California, Hawaii, and other states of the United States. Sterling Construction has a market cap of $168.3 million and is part of the industrial goods sector. Shares are down 24.8% year-to-date as of the close of trading on Wednesday. Currently there are 2 analysts who rate Sterling Construction 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 Sterling Construction 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 good cash flow from operations. However, as a counter to these strengths, we also find weaknesses including disappointing return on equity, a generally disappointing performance in the stock itself and poor profit margins.

Highlights from TheStreet Ratings analysis on STRL go as follows:

  • The revenue growth greatly exceeded the industry average of 11.8%. Since the same quarter one year prior, revenues rose by 46.1%. Growth in the company's revenue appears to have helped boost the earnings per share.
  • STRL's debt-to-equity ratio is very low at 0.14 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 1.11, which illustrates the ability to avoid short-term cash problems.
  • STERLING CONSTRUCTION CO INC reported significant earnings per share improvement 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, STERLING CONSTRUCTION CO INC reported poor results of -$4.90 versus -$0.27 in the prior year. This year, the market expects an improvement in earnings ($0.35 versus -$4.90).
  • STRL has underperformed the S&P 500 Index, declining 8.15% 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.
  • 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, STERLING CONSTRUCTION CO INC's return on equity significantly trails that of both the industry average and the S&P 500.

You can view the full analysis from the report here: Sterling Construction 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, Casella Waste Systems ( CWST) was down $0.25 (5.3%) to $4.50 on heavy volume. Throughout the day, 197,774 shares of Casella Waste Systems exchanged hands as compared to its average daily volume of 125,400 shares. The stock ranged in price between $4.50-$4.80 after having opened the day at $4.60 as compared to the previous trading day's close of $4.75.

Casella Waste Systems, Inc., together with its subsidiaries, operates as a regional, vertically-integrated solid waste, recycling, and resource management services company in the northeastern United States. Casella Waste Systems has a market cap of $184.6 million and is part of the industrial goods sector. Shares are down 18.1% year-to-date as of the close of trading on Wednesday. Currently there are 3 analysts who rate Casella Waste Systems a buy, no analysts rate it a sell, and 5 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 Casella Waste Systems as a sell. Among the areas we feel are negative, one of the most important has been poor profit margins.

Highlights from TheStreet Ratings analysis on CWST go as follows:

  • The gross profit margin for CASELLA WASTE SYS INC is currently lower than what is desirable, coming in at 28.62%. It has decreased from the same quarter the previous year. Along with this, the net profit margin of -9.93% is significantly below that of the industry average.
  • In its most recent trading session, CWST has closed at a price level that was not very different from its closing price of one year earlier. This is probably due to its weak earnings growth as well as other mixed factors. Turning our attention to the future direction of the stock, we do not believe this stock offers ample reward opportunity to compensate for the risks, despite the fact that it rose over the past year.
  • The company, on the basis of net income growth from the same quarter one year ago, has significantly underperformed compared to the Commercial Services & Supplies industry average, but is greater than that of the S&P 500. The net income increased by 11.8% when compared to the same quarter one year prior, going from -$13.40 million to -$11.81 million.
  • CASELLA WASTE SYS INC's earnings per share declined by 20.0% 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, CASELLA WASTE SYS INC continued to lose money by earning -$0.58 versus -$1.50 in the prior year. This year, the market expects an improvement in earnings (-$0.24 versus -$0.58).
  • Net operating cash flow has slightly increased to $11.88 million or 8.62% when compared to the same quarter last year. The firm also exceeded the industry average cash flow growth rate of -5.58%.

You can view the full analysis from the report here: Casella Waste Systems 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.

Abengoa ( ABGB) was another company that pushed the Materials & Construction industry lower today. Abengoa was down $0.63 (2.2%) to $27.82 on light volume. Throughout the day, 4,961 shares of Abengoa exchanged hands as compared to its average daily volume of 11,000 shares. The stock ranged in price between $27.82-$28.05 after having opened the day at $28.04 as compared to the previous trading day's close of $28.45.

Abengoa has a market cap of $4.8 billion and is part of the industrial goods sector. Shares are up 88.7% year-to-date as of the close of trading on Wednesday. Currently there are no analysts who rate Abengoa 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.

More from Markets

Deutsche Bank Plans 'Significant' Job Cuts as Q1 Profits Slump

Deutsche Bank Plans 'Significant' Job Cuts as Q1 Profits Slump

Boeing Is Back to Cruising Altitude; GM Gets Assist From Amazon -- ICYMI

Boeing Is Back to Cruising Altitude; GM Gets Assist From Amazon -- ICYMI

Investors Shouldn't Be Worried About Trump's Trade Tariffs: Ian Bremmer

Investors Shouldn't Be Worried About Trump's Trade Tariffs: Ian Bremmer

Aceto's Search for Deal May Be Slowed by DOJ Subpoena

Aceto's Search for Deal May Be Slowed by DOJ Subpoena

Dow and S&P 500 Finish Higher Amid Strong Corporate Earnings

Dow and S&P 500 Finish Higher Amid Strong Corporate Earnings