3 Stocks Pushing The Chemicals 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 Chemicals industry as a whole closed the day up 0.1% versus the S&P 500, which was down 0.3%. Laggards within the Chemicals industry included Ikonics ( IKNX), down 5.5%, Lightbridge ( LTBR), down 3.7%, China Green Agriculture ( CGA), down 4.1%, CVR Partners ( UAN), down 1.6% and Braskem ( BAK), down 3.1%.

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

Braskem ( BAK) is one of the companies that pushed the Chemicals industry lower today. Braskem was down $0.43 (3.1%) to $13.47 on average volume. Throughout the day, 289,233 shares of Braskem exchanged hands as compared to its average daily volume of 280,500 shares. The stock ranged in price between $13.44-$13.88 after having opened the day at $13.86 as compared to the previous trading day's close of $13.90.

Braskem S.A., together with its subsidiaries, produces and sells thermoplastic resins. Braskem has a market cap of $5.6 billion and is part of the basic materials sector. Shares are down 22.1% year-to-date as of the close of trading on Friday. Currently there is 1 analyst who rates Braskem a buy, no analysts rate it a sell, and 1 rates it a hold.

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

Highlights from TheStreet Ratings analysis on BAK go as follows:

  • The debt-to-equity ratio is very high at 2.82 and currently higher than the industry average, implying increased risk associated with the management of debt levels within the company. To add to this, BAK has a quick ratio of 0.69, this demonstrates the lack of ability of the company to cover short-term liquidity needs.
  • The gross profit margin for BRASKEM SA is rather low; currently it is at 16.15%. It has decreased from the same quarter the previous year. Along with this, the net profit margin of 1.23% significantly trails the industry average.
  • Net operating cash flow has significantly decreased to $283.87 million or 65.89% when compared to the same quarter last year. In addition, when comparing to the industry average, the firm's growth rate is much lower.
  • BAK has underperformed the S&P 500 Index, declining 8.61% 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. In comparison to the other companies in the Chemicals industry and the overall market, BRASKEM SA's return on equity is significantly below that of the industry average and is below that of the S&P 500.

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

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At the close, CVR Partners ( UAN) was down $0.24 (1.6%) to $15.26 on average volume. Throughout the day, 192,936 shares of CVR Partners exchanged hands as compared to its average daily volume of 213,100 shares. The stock ranged in price between $15.20-$15.50 after having opened the day at $15.50 as compared to the previous trading day's close of $15.50.

CVR Partners, LP is engaged in the production, distribution, and marketing of nitrogen fertilizers in the United States. Its nitrogen fertilizer products include ammonia and urea ammonium nitrate (UAN). CVR Partners has a market cap of $1.1 billion and is part of the basic materials sector. Shares are down 5.8% year-to-date as of the close of trading on Friday. Currently there are no analysts who rate CVR Partners a buy, no analysts rate it a sell, and 3 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 CVR Partners as a hold. The company's strengths can be seen in multiple areas, such as its largely solid financial position with reasonable debt levels by most measures, good cash flow from operations and expanding profit margins. However, as a counter to these strengths, we also find weaknesses including deteriorating net income, disappointing return on equity and a generally disappointing performance in the stock itself.

Highlights from TheStreet Ratings analysis on UAN go as follows:

  • UAN's debt-to-equity ratio is very low at 0.30 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 2.93, which clearly demonstrates the ability to cover short-term cash needs.
  • Net operating cash flow has increased to $24.35 million or 42.10% when compared to the same quarter last year. In addition, CVR PARTNERS LP has also vastly surpassed the industry average cash flow growth rate of -14.52%.
  • 39.97% is the gross profit margin for CVR PARTNERS LP which we consider to be strong. Despite the high profit margin, it has decreased significantly from the same period last year. Despite the mixed results of the gross profit margin, UAN's net profit margin of 22.18% significantly outperformed against the industry.
  • 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 Chemicals industry and the overall market on the basis of return on equity, CVR PARTNERS LP has underperformed in comparison with the industry average, but has exceeded that of the S&P 500.
  • 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 Chemicals industry. The net income has significantly decreased by 51.7% when compared to the same quarter one year ago, falling from $35.44 million to $17.13 million.

You can view the full analysis from the report here: CVR Partners 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.

China Green Agriculture ( CGA) was another company that pushed the Chemicals industry lower today. China Green Agriculture was down $0.10 (4.1%) to $2.33 on heavy volume. Throughout the day, 508,118 shares of China Green Agriculture exchanged hands as compared to its average daily volume of 181,400 shares. The stock ranged in price between $2.28-$2.43 after having opened the day at $2.36 as compared to the previous trading day's close of $2.43.

China Green Agriculture, Inc., through its subsidiaries, is engaged in the research, development, production, distribution, and sale of various types of fertilizers and agricultural products primarily in the People's Republic of China. China Green Agriculture has a market cap of $76.4 million and is part of the basic materials sector. Shares are down 32.9% year-to-date as of the close of trading on Friday.

TheStreet Ratings rates China Green Agriculture 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 attractive valuation levels. However, as a counter to these strengths, we also find weaknesses including deteriorating net income, disappointing return on equity and weak operating cash flow.

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

Highlights from TheStreet Ratings analysis on CGA go as follows:

  • Despite its growing revenue, the company underperformed as compared with the industry average of 7.8%. Since the same quarter one year prior, revenues slightly increased by 6.7%. This growth in revenue does not appear to have trickled down to the company's bottom line, displayed by a decline in earnings per share.
  • CGA's debt-to-equity ratio is very low at 0.09 and is currently below that of the industry average, implying that there has been very successful management of debt levels. To add to this, CGA has a quick ratio of 2.07, which demonstrates the ability of the company to cover short-term liquidity needs.
  • 48.02% is the gross profit margin for CHINA GREEN AGRICULTURE INC which we consider to be strong. 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 10.25% trails 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 Chemicals industry. The net income has significantly decreased by 46.2% when compared to the same quarter one year ago, falling from $13.41 million to $7.21 million.
  • The company's current return on equity has slightly decreased from the same quarter one year prior. This implies a minor weakness in the organization. In comparison to the other companies in the Chemicals industry and the overall market, CHINA GREEN AGRICULTURE INC's return on equity is significantly below that of the industry average and is below that of the S&P 500.

You can view the full analysis from the report here: China Green Agriculture 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.

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