3 Stocks Improving Performance Of 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.

Two out of the three major indices are trading lower today with the Dow Jones Industrial Average ( ^DJI) trading down 25.94 points (-0.2%) at 17,111 as of Monday, Sept. 8, 2014, 4:20 PM ET. The NYSE advances/declines ratio sits at 1,156 issues advancing vs. 1,888 declining with 146 unchanged.

The Basic Materials sector as a whole closed the day down 1.1% versus the S&P 500, which was down 0.3%. Top gainers within the Basic Materials sector included Mines Management ( MGN), up 1.7%, Lilis Energy ( LLEX), up 1.9%, Sutor Technology Group ( SUTR), up 4.7%, Houston American Energy ( HUSA), up 4.2% and Escalera Resources ( ESCR), up 2.1%.

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

Houston American Energy ( HUSA) is one of the companies that pushed the Basic Materials sector higher today. Houston American Energy was up $0.01 (4.2%) to $0.25 on light volume. Throughout the day, 146,521 shares of Houston American Energy exchanged hands as compared to its average daily volume of 210,300 shares. The stock ranged in a price between $0.24-$0.28 after having opened the day at $0.24 as compared to the previous trading day's close of $0.24.

Houston American Energy Corp., an independent energy company, explores for, develops, and produces natural gas, crude oil, and condensate from properties located principally in the Gulf Coast area of the United States and South America. Houston American Energy has a market cap of $12.5 million and is part of the chemicals industry. Shares are down 4.0% year-to-date as of the close of trading on Friday. Currently there are no analysts who rate Houston American Energy a buy, no analysts rate it a sell, and none rate it a hold.

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TheStreet Ratings rates Houston American Energy as a sell. The company's weaknesses can be seen in multiple areas, such as its weak operating cash flow and generally disappointing historical performance in the stock itself.

Highlights from TheStreet Ratings analysis on HUSA go as follows:

  • Net operating cash flow has significantly decreased to -$0.42 million or 135.29% when compared to the same quarter last year. In addition, when comparing to the industry average, the firm's growth rate is much lower.
  • HUSA has underperformed the S&P 500 Index, declining 21.57% 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.
  • 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 Oil, Gas & Consumable Fuels industry and the overall market, HOUSTON AMERN ENERGY CORP's return on equity significantly trails that of both the industry average and the S&P 500.
  • The gross profit margin for HOUSTON AMERN ENERGY CORP is rather high; currently it is at 67.16%. It has increased significantly from the same period last year. Regardless of the strong results of the gross profit margin, the net profit margin of -1020.89% is in-line with the industry average.
  • HUSA has no debt to speak of therefore resulting in a debt-to-equity ratio of zero, which we consider to be a relatively favorable sign. Along with this, the company maintains a quick ratio of 53.71, which clearly demonstrates the ability to cover short-term cash needs.

You can view the full analysis from the report here: Houston American Energy 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, Sutor Technology Group ( SUTR) was up $0.04 (4.7%) to $0.85 on heavy volume. Throughout the day, 85,875 shares of Sutor Technology Group exchanged hands as compared to its average daily volume of 55,700 shares. The stock ranged in a price between $0.82-$0.85 after having opened the day at $0.84 as compared to the previous trading day's close of $0.81.

Sutor Technology Group Limited, through its subsidiaries, manufactures and sells finished steel products in the People's Republic of China. Sutor Technology Group has a market cap of $32.5 million and is part of the chemicals industry. Shares are down 55.7% year-to-date as of the close of trading on Friday. Currently there are no analysts who rate Sutor Technology Group a buy, no analysts rate it a sell, and none 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 Sutor Technology Group as a hold. The company's strengths can be seen in multiple areas, such as its attractive valuation levels, good cash flow from operations and notable return on equity. However, as a counter to these strengths, we also find weaknesses including unimpressive growth in net income, poor profit margins and a generally disappointing performance in the stock itself.

Highlights from TheStreet Ratings analysis on SUTR go as follows:

  • Net operating cash flow has significantly increased by 196.77% to $16.29 million when compared to the same quarter last year. In addition, SUTOR TECHNOLOGY GROUP LTD has also vastly surpassed the industry average cash flow growth rate of -21.40%.
  • 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, SUTOR TECHNOLOGY GROUP LTD 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 SUTOR TECHNOLOGY GROUP LTD is currently extremely low, coming in at 9.97%. Regardless of SUTR's low profit margin, it has managed to increase from the same period last year. Despite the mixed results of the gross profit margin, SUTR's net profit margin of 1.15% is significantly lower than the industry average.
  • 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 71.3% when compared to the same quarter one year ago, falling from $3.88 million to $1.11 million.

You can view the full analysis from the report here: Sutor Technology Group 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.

Mines Management ( MGN) was another company that pushed the Basic Materials sector higher today. Mines Management was up $0.01 (1.7%) to $0.69 on heavy volume. Throughout the day, 123,790 shares of Mines Management exchanged hands as compared to its average daily volume of 59,900 shares. The stock ranged in a price between $0.60-$0.74 after having opened the day at $0.64 as compared to the previous trading day's close of $0.68.

Mines Management, Inc., together with its subsidiaries, acquires, explores, and develops various mineral properties in North and South America. The company explores for silver, and associated base and precious metals. Mines Management has a market cap of $20.8 million and is part of the chemicals industry. Shares are up 13.1% year-to-date as of the close of trading on Friday. Currently there are no analysts who rate Mines Management a buy, no analysts rate it a sell, and none rate it a hold.

TheStreet Ratings rates Mines Management 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 MGN 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 Metals & Mining industry and the overall market, MINES MANAGEMENT INC's return on equity significantly trails that of both the industry average and the S&P 500.
  • MGN has underperformed the S&P 500 Index, declining 11.02% 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.
  • The company, on the basis of net income growth from the same quarter one year ago, has significantly underperformed compared to the Metals & Mining industry average, but is greater than that of the S&P 500. The net income increased by 28.1% when compared to the same quarter one year prior, rising from -$2.15 million to -$1.54 million.
  • MGN, with its decline in revenue, underperformed when compared the industry average of 0.6%. Since the same quarter one year prior, revenues fell by 12.5%. The declining revenue has not hurt the company's bottom line, with increasing earnings per share.
  • MINES MANAGEMENT INC has improved earnings per share by 28.6% 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. During the past fiscal year, MINES MANAGEMENT INC continued to lose money by earning -$0.25 versus -$0.28 in the prior year.

You can view the full analysis from the report here: Mines Management 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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