3 Materials & Construction Stocks Moving The Industry Upward

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.

Two out of the three major indices are trading lower today with the Dow Jones Industrial Average ( ^DJI) trading down 30.89 points (-0.2%) at 17,068 as of Tuesday, Sept. 2, 2014, 4:20 PM ET. The NYSE advances/declines ratio sits at 1,485 issues advancing vs. 1,589 declining with 141 unchanged.

The Materials & Construction industry as a whole closed the day up 0.2% versus the S&P 500, which was down 0.1%. Top gainers within the Materials & Construction industry included Comstock ( CHCI), up 1.7%, Goldfield ( GV), up 2.4%, Abengoa SA ADR repr Class B ( ABGB), up 1.9%, Pure Cycle ( PCYO), up 1.8% and Sterling Construction ( STRL), up 1.9%.

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

Pure Cycle ( PCYO) is one of the companies that pushed the Materials & Construction industry higher today. Pure Cycle was up $0.12 (1.8%) to $6.64 on light volume. Throughout the day, 19,509 shares of Pure Cycle exchanged hands as compared to its average daily volume of 91,300 shares. The stock ranged in a price between $6.52-$6.78 after having opened the day at $6.52 as compared to the previous trading day's close of $6.52.

Pure Cycle Corporation designs, constructs, operates, and maintains water and wastewater systems in the Denver metropolitan area. Pure Cycle has a market cap of $156.7 million and is part of the industrial goods sector. Shares are up 3.0% year-to-date as of the close of trading on Friday. Currently there is 1 analyst who rates Pure Cycle a buy, no analysts rate it a sell, and none rate it a hold.

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TheStreet Ratings rates Pure Cycle as a hold. The company's strengths can be seen in multiple areas, such as its robust revenue growth, largely solid financial position with reasonable debt levels by most measures and solid stock price performance. However, as a counter to these strengths, we find that the company's return on equity has been disappointing.

Highlights from TheStreet Ratings analysis on PCYO go as follows:

  • PCYO's very impressive revenue growth greatly exceeded the industry average of 7.8%. Since the same quarter one year prior, revenues leaped by 64.4%. This growth in revenue appears to have trickled down to the company's bottom line, improving the earnings per share.
  • PCYO's debt-to-equity ratio is very low at 0.05 and is currently below that of the industry average, implying that there has been very successful management of debt levels. Along with this, the company maintains a quick ratio of 3.48, which clearly demonstrates the ability to cover short-term cash needs.
  • The gross profit margin for PURE CYCLE CORP is currently very high, coming in at 79.82%. 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 -56.25% is in-line with the industry average.
  • 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 Water Utilities industry and the overall market, PURE CYCLE CORP'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: Pure Cycle 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, Abengoa SA ADR repr Class B ( ABGB) was up $0.54 (1.9%) to $29.32 on light volume. Throughout the day, 7,164 shares of Abengoa SA ADR repr Class B exchanged hands as compared to its average daily volume of 10,900 shares. The stock ranged in a price between $29.15-$29.48 after having opened the day at $29.20 as compared to the previous trading day's close of $28.78.

Abengoa SA ADR repr Class B has a market cap of $4.8 billion and is part of the industrial goods sector. Shares are up 90.9% year-to-date as of the close of trading on Friday.

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

Comstock ( CHCI) was another company that pushed the Materials & Construction industry higher today. Comstock was up $0.02 (1.7%) to $1.19 on light volume. Throughout the day, 11,389 shares of Comstock exchanged hands as compared to its average daily volume of 50,600 shares. The stock ranged in a price between $1.19-$1.21 after having opened the day at $1.21 as compared to the previous trading day's close of $1.17.

Comstock Holding Companies, Inc. operates as a real estate development and construction services company in the United States. The company operates through three segments: Homebuilding, Multi-family, and Real Estate Services. Comstock has a market cap of $22.0 million and is part of the industrial goods sector. Shares are down 41.5% year-to-date as of the close of trading on Friday. Currently there are no analysts who rate Comstock a buy, no analysts rate it a sell, and none rate it a hold.

TheStreet Ratings rates Comstock as a sell. The company's weaknesses can be seen in multiple areas, such as its unimpressive growth in net income, generally high debt management risk, disappointing return on equity, poor profit margins and weak operating cash flow.

Highlights from TheStreet Ratings analysis on CHCI go as follows:

  • 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 Household Durables industry. The net income has significantly decreased by 318.4% when compared to the same quarter one year ago, falling from $0.72 million to -$1.58 million.
  • The debt-to-equity ratio is very high at 10.87 and currently higher than the industry average, implying increased risk associated with the management of debt levels within the company.
  • 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 Household Durables industry and the overall market, COMSTOCK HOLDING COS INC's return on equity significantly trails that of both the industry average and the S&P 500.
  • The gross profit margin for COMSTOCK HOLDING COS INC is rather low; currently it is at 20.18%. It has decreased from the same quarter the previous year. Along with this, the net profit margin of -19.85% is significantly below that of the industry average.
  • Net operating cash flow has significantly decreased to -$2.59 million or 163.52% 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: Comstock 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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