3 Stocks Improving Performance Of The Chemicals Industry

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 19 points (0.1%) at 17,098 as of Friday, Aug. 29, 2014, 4:20 PM ET. The NYSE advances/declines ratio sits at 2,137 issues advancing vs. 890 declining with 157 unchanged.

The Chemicals industry as a whole closed the day up 0.5% versus the S&P 500, which was up 0.3%. Top gainers within the Chemicals industry included Ikonics ( IKNX), up 2.9%, Gevo ( GEVO), up 10.4%, Flexible Solutions International ( FSI), up 4.3%, Amyris ( AMRS), up 2.9% and Hawkins ( HWKN), up 1.6%.

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

Amyris ( AMRS) is one of the companies that pushed the Chemicals industry higher today. Amyris was up $0.12 (2.9%) to $4.22 on average volume. Throughout the day, 179,918 shares of Amyris exchanged hands as compared to its average daily volume of 196,900 shares. The stock ranged in a price between $4.00-$4.29 after having opened the day at $4.10 as compared to the previous trading day's close of $4.10.

Amyris, Inc., a renewable products company, provides various alternatives to a range of petroleum-sourced products for the specialty chemical and transportation fuel markets worldwide. Amyris has a market cap of $345.0 million and is part of the basic materials sector. Shares are down 22.5% year-to-date as of the close of trading on Thursday. Currently there are no analysts who rate Amyris a buy, no analysts rate it a sell, and 4 rate it a hold.

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TheStreet Ratings rates Amyris as a sell. The area that we feel has been the company's primary weakness has been its declining revenues.

Highlights from TheStreet Ratings analysis on AMRS go as follows:

  • AMRS, with its decline in revenue, underperformed when compared the industry average of 2.4%. Since the same quarter one year prior, revenues fell by 14.2%. The declining revenue has not hurt the company's bottom line, with increasing earnings per share.
  • 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 8.7% when compared to the same quarter one year prior, going from -$38.88 million to -$35.48 million.
  • The gross profit margin for AMYRIS INC is rather high; currently it is at 59.47%. It has increased from the same quarter the previous year. Regardless of the strong results of the gross profit margin, the net profit margin of -381.20% is in-line with the industry average.
  • Investors have driven up the company's shares by 76.20% over the past year, a rise that has exceeded that of the S&P 500 Index. Regarding the future course of this stock, we feel that the risks involved in investing in AMRS do not compensate for any future upside potential, despite the fact that it has seen nice gains over the past 12 months.
  • AMYRIS INC has improved earnings per share by 11.8% in the most recent quarter compared to the same quarter a year ago. The company has demonstrated a pattern of positive earnings per share growth over the past two years. We feel that this trend should continue. This trend suggests that the performance of the business is improving. During the past fiscal year, AMYRIS INC continued to lose money by earning -$3.10 versus -$3.75 in the prior year. This year, the market expects an improvement in earnings (-$0.92 versus -$3.10).

You can view the full analysis from the report here: Amyris Ratings Report

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At the close, Flexible Solutions International ( FSI) was up $0.07 (4.3%) to $1.69 on heavy volume. Throughout the day, 667,156 shares of Flexible Solutions International exchanged hands as compared to its average daily volume of 339,900 shares. The stock ranged in a price between $1.60-$1.86 after having opened the day at $1.65 as compared to the previous trading day's close of $1.62.

Flexible Solutions International, Inc., together with its subsidiaries, develops, manufactures, and markets specialty chemicals that slow the evaporation of water. Flexible Solutions International has a market cap of $20.8 million and is part of the basic materials sector. Shares are up 68.8% year-to-date as of the close of trading on Thursday. Currently there are no analysts who rate Flexible Solutions International 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 Flexible Solutions International as a hold. The company's strengths can be seen in multiple areas, such as its solid stock price performance, compelling growth in net income and largely solid financial position with reasonable debt levels by most measures. However, as a counter to these strengths, we find that the growth in the company's earnings per share has not been good.

Highlights from TheStreet Ratings analysis on FSI go as follows:

  • Powered by its strong earnings growth of 200.00% and other important driving factors, this stock has surged by 64.22% over the past year, outperforming the rise in the S&P 500 Index during the same period. 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 net income growth from the same quarter one year ago has significantly exceeded that of the S&P 500 and the Chemicals industry. The net income increased by 471.4% when compared to the same quarter one year prior, rising from $0.07 million to $0.40 million.
  • 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 Chemicals industry and the overall market on the basis of return on equity, FLEXIBLE SOLUTIONS INTL INC has underperformed in comparison with the industry average, but has exceeded that of the S&P 500.
  • FSI, with its decline in revenue, underperformed when compared the industry average of 7.8%. Since the same quarter one year prior, revenues fell by 12.2%. The declining revenue has not hurt the company's bottom line, with increasing earnings per share.
  • FLEXIBLE SOLUTIONS INTL INC reported significant earnings per share improvement in the most recent quarter compared to the same quarter a year ago. The company has demonstrated a pattern of positive earnings per share growth over the past two years. However, we anticipate underperformance relative to this pattern in the coming year. During the past fiscal year, FLEXIBLE SOLUTIONS INTL INC turned its bottom line around by earning $0.14 versus -$0.08 in the prior year. For the next year, the market is expecting a contraction of 78.6% in earnings ($0.03 versus $0.14).

You can view the full analysis from the report here: Flexible Solutions International 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.

Gevo ( GEVO) was another company that pushed the Chemicals industry higher today. Gevo was up $0.05 (10.4%) to $0.52 on heavy volume. Throughout the day, 2,053,491 shares of Gevo exchanged hands as compared to its average daily volume of 669,600 shares. The stock ranged in a price between $0.47-$0.55 after having opened the day at $0.47 as compared to the previous trading day's close of $0.47.

Gevo, Inc., a renewable chemicals and biofuels company, focuses primarily on the production and sale of isobutanol and related products from renewable feedstocks. Gevo has a market cap of $32.3 million and is part of the basic materials sector. Shares are down 67.5% year-to-date as of the close of trading on Thursday. Currently there are 2 analysts who rate Gevo a buy, no analysts rate it a sell, and none rate it a hold.

TheStreet Ratings rates Gevo as a sell. The company's weaknesses can be seen in multiple areas, such as its deteriorating net income, generally high debt management risk, disappointing return on equity, weak operating cash flow and generally disappointing historical performance in the stock itself.

Highlights from TheStreet Ratings analysis on GEVO 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 greatly underperformed compared to the Oil, Gas & Consumable Fuels industry average. The net income has decreased by 12.7% when compared to the same quarter one year ago, dropping from -$15.22 million to -$17.16 million.
  • The debt-to-equity ratio of 1.03 is relatively high when compared with the industry average, suggesting a need for better debt level management. To add to this, GEVO has a quick ratio of 0.68, this demonstrates the lack of ability of the company to cover short-term liquidity needs.
  • 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 Oil, Gas & Consumable Fuels industry and the overall market, GEVO INC's return on equity significantly trails that of both the industry average and the S&P 500.
  • Net operating cash flow has decreased to -$12.23 million or 20.16% when compared to the same quarter last year. In addition, when comparing the cash generation rate to the industry average, the firm's growth is significantly lower.
  • GEVO'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 73.84%, 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.

You can view the full analysis from the report here: Gevo 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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