3 Stocks Pushing The Basic Materials Sector Lower

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The Basic Materials sector as a whole closed the day up 0.3% versus the S&P 500, which was up 0.5%. Laggards within the Basic Materials sector included Timberline Resources ( TLR), down 2.2%, Oxford Resource Partners ( OXF), down 2.9%, China Gerui Advanced Materials Group ( CHOP), down 4.1%, Mines Management ( MGN), down 3.5% and Solitario Exploration & Royalty ( XPL), down 2.7%.

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

China Gerui Advanced Materials Group ( CHOP) is one of the companies that pushed the Basic Materials sector lower today. China Gerui Advanced Materials Group was down $0.02 (4.1%) to $0.46 on heavy volume. Throughout the day, 130,115 shares of China Gerui Advanced Materials Group exchanged hands as compared to its average daily volume of 65,600 shares. The stock ranged in price between $0.46-$0.52 after having opened the day at $0.50 as compared to the previous trading day's close of $0.48.

China Gerui Advanced Materials Group Limited operates as a contract manufacturer of cold-rolled narrow strip steel products in the People's Republic of China and internationally. The company converts steel manufactured by third parties into thin steel sheets and strips. China Gerui Advanced Materials Group has a market cap of $36.3 million and is part of the energy industry. Shares are down 51.2% year-to-date as of the close of trading on Thursday.

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TheStreet Ratings rates China Gerui Advanced Materials Group as a sell. The company's weaknesses can be seen in multiple areas, such as its feeble growth in its earnings per share, deteriorating net income, disappointing return on equity, poor profit margins and weak operating cash flow.

Highlights from TheStreet Ratings analysis on CHOP go as follows:

  • CHINA GERUI ADV MATERIALS GP's earnings have gone downhill when comparing its most recently reported quarter with the same quarter a year earlier. The company has reported a trend of declining earnings per share over the past two years. During the past fiscal year, CHINA GERUI ADV MATERIALS GP swung to a loss, reporting -$0.23 versus $0.45 in the prior year.
  • 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 4304.2% when compared to the same quarter one year ago, falling from -$0.10 million to -$4.18 million.
  • Current return on equity is lower than its ROE from the same quarter one year prior. This is a clear sign of weakness within the company. Compared to other companies in the Metals & Mining industry and the overall market on the basis of return on equity, CHINA GERUI ADV MATERIALS GP underperformed against that of the industry average and is significantly less than that of the S&P 500.
  • The gross profit margin for CHINA GERUI ADV MATERIALS GP is currently extremely low, coming in at 8.19%. It has decreased from the same quarter the previous year. Along with this, the net profit margin of -15.82% is significantly below that of the industry average.
  • Net operating cash flow has decreased to $2.22 million or 43.77% 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.

You can view the full analysis from the report here: China Gerui Advanced Materials Group Ratings Report

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At the close, Oxford Resource Partners ( OXF) was down $0.03 (2.9%) to $0.97 on light volume. Throughout the day, 16,657 shares of Oxford Resource Partners exchanged hands as compared to its average daily volume of 28,800 shares. The stock ranged in price between $0.96-$1.00 after having opened the day at $1.00 as compared to the previous trading day's close of $1.00.

Oxford Resource Partners, LP produces and markets thermal coal in the United States. The company markets its thermal coal to utilities, industrial customers, municipalities, and other coal-related entities. Oxford Resource Partners has a market cap of $10.7 million and is part of the energy industry. Shares are down 18.7% year-to-date as of the close of trading on Thursday. Currently there are no analysts who rate Oxford Resource Partners a buy, no analysts rate it a sell, and 1 rates it a hold.

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TheStreet Ratings rates Oxford Resource Partners as a sell. The company's weaknesses can be seen in multiple areas, such as its weak operating cash flow, poor profit margins and generally disappointing historical performance in the stock itself.

Highlights from TheStreet Ratings analysis on OXF go as follows:

  • Net operating cash flow has declined marginally to $4.78 million or 8.44% when compared to the same quarter last year. In conjunction, when comparing current results to the industry average, OXFORD RESOURCE PARTNERS LP has marginally lower results.
  • The gross profit margin for OXFORD RESOURCE PARTNERS LP is rather low; currently it is at 18.17%. Regardless of OXF's low profit margin, it has managed to increase from the same period last year. Despite the mixed results of the gross profit margin, OXF's net profit margin of -3.53% significantly underperformed when compared to the industry average.
  • OXF'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 54.85%, 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.
  • OXFORD RESOURCE PARTNERS LP has improved earnings per share by 47.6% 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 year. However, we anticipate underperformance relative to this pattern in the coming year. During the past fiscal year, OXFORD RESOURCE PARTNERS LP continued to lose money by earning -$1.07 versus -$1.27 in the prior year. For the next year, the market is expecting a contraction of 7.0% in earnings (-$1.15 versus -$1.07).
  • OXF, with its decline in revenue, slightly underperformed the industry average of 3.5%. Since the same quarter one year prior, revenues slightly dropped by 5.8%. The declining revenue has not hurt the company's bottom line, with increasing earnings per share.

You can view the full analysis from the report here: Oxford Resource Partners Ratings Report

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Timberline Resources ( TLR) was another company that pushed the Basic Materials sector lower today. Timberline Resources was down $0.00 (2.2%) to $0.08 on average volume. Throughout the day, 179,634 shares of Timberline Resources exchanged hands as compared to its average daily volume of 145,400 shares. The stock ranged in price between $0.08-$0.09 after having opened the day at $0.08 as compared to the previous trading day's close of $0.08.

Timberline Resources has a market cap of $6.1 million and is part of the energy industry. Shares are down 52.6% year-to-date as of the close of trading on Thursday.

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