3 Stocks Pushing The Materials & Construction 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 Materials & Construction industry as a whole closed the day down 0.7% versus the S&P 500, which was down 0.7%. Laggards within the Materials & Construction industry included Guanwei Recycling ( GPRC), down 3.5%, Industrial Services of America ( IDSA), down 2.3%, James Hardie Industries ( JHX), down 1.6%, Abengoa ( ABGB), down 2.4% and Goldfield ( GV), down 5.8%.

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

James Hardie Industries ( JHX) is one of the companies that pushed the Materials & Construction industry lower today. James Hardie Industries was down $0.97 (1.6%) to $59.11 on average volume. Throughout the day, 2,321 shares of James Hardie Industries exchanged hands as compared to its average daily volume of 2,800 shares. The stock ranged in price between $59.11-$59.67 after having opened the day at $59.67 as compared to the previous trading day's close of $60.08.

James Hardie Industries plc, together with its subsidiaries, manufactures and sells fiber cement products and systems for interior and exterior building construction applications primarily in the United States, Canada, Australia, New Zealand, the Philippines, and Europe. James Hardie Industries has a market cap of $5.4 billion and is part of the industrial goods sector. Shares are up 4.7% year-to-date as of the close of trading on Monday.

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TheStreet Ratings rates James Hardie Industries as a hold. The company's strengths can be seen in multiple areas, such as its revenue growth, expanding profit margins and good cash flow from operations. However, as a counter to these strengths, we also find weaknesses including unimpressive growth in net income and feeble growth in the company's earnings per share.

Highlights from TheStreet Ratings analysis on JHX go as follows:

  • The revenue growth came in higher than the industry average of 4.4%. Since the same quarter one year prior, revenues rose by 15.2%. 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.
  • 37.38% is the gross profit margin for JAMES HARDIE INDUSTRIES PLC which we consider to be strong. It has increased from the same quarter the previous year.
  • Net operating cash flow has significantly increased by 161.92% to $68.10 million when compared to the same quarter last year. Despite an increase in cash flow of 161.92%, JAMES HARDIE INDUSTRIES PLC is still growing at a significantly lower rate than the industry average of 887.96%.
  • JAMES HARDIE INDUSTRIES PLC has experienced a steep decline in earnings per share in the most recent quarter in comparison to its performance from the same quarter a year ago. This company has reported somewhat volatile earnings recently. We feel it is likely to report a decline in earnings in the coming year. During the past fiscal year, JAMES HARDIE INDUSTRIES PLC increased its bottom line by earning $1.15 versus $0.51 in the prior year. For the next year, the market is expecting a contraction of 46.1% in earnings ($0.62 versus $1.15).
  • 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 Construction Materials industry. The net income has significantly decreased by 168.8% when compared to the same quarter one year ago, falling from -$69.50 million to -$186.80 million.

You can view the full analysis from the report here: James Hardie Industries Ratings Report

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At the close, Industrial Services of America ( IDSA) was down $0.14 (2.3%) to $6.04 on average volume. Throughout the day, 14,419 shares of Industrial Services of America exchanged hands as compared to its average daily volume of 14,200 shares. The stock ranged in price between $6.02-$6.25 after having opened the day at $6.25 as compared to the previous trading day's close of $6.18.

Industrial Services of America, Inc. operates as a recycler of stainless steel, ferrous, and non-ferrous scrap. The company operates in two segments, Recycling and Waste Services. Industrial Services of America has a market cap of $48.9 million and is part of the industrial goods sector. Shares are up 93.7% year-to-date as of the close of trading on Monday.

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TheStreet Ratings rates Industrial Services of America 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 and poor profit margins.

Highlights from TheStreet Ratings analysis on IDSA go as follows:

  • INDUSTRIAL SERVICES AMER INC has experienced a steep decline in earnings per share in the most recent quarter in comparison to its performance from the same quarter a year ago. The company has reported a trend of declining earnings per share over the past two years. During the past fiscal year, INDUSTRIAL SERVICES AMER INC reported poor results of -$1.96 versus -$0.96 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 Commercial Services & Supplies industry. The net income has significantly decreased by 460.9% when compared to the same quarter one year ago, falling from -$0.12 million to -$0.65 million.
  • 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 Commercial Services & Supplies industry and the overall market, INDUSTRIAL SERVICES AMER INC's return on equity significantly trails that of both the industry average and the S&P 500.
  • The gross profit margin for INDUSTRIAL SERVICES AMER INC is currently extremely low, coming in at 6.10%. It has decreased from the same quarter the previous year. Along with this, the net profit margin of -2.51% is significantly below that of the industry average.
  • The revenue fell significantly faster than the industry average of 4.1%. Since the same quarter one year prior, revenues fell by 26.1%. The declining revenue appears to have seeped down to the company's bottom line, decreasing earnings per share.

You can view the full analysis from the report here: Industrial Services of America Ratings Report

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Guanwei Recycling ( GPRC) was another company that pushed the Materials & Construction industry lower today. Guanwei Recycling was down $0.03 (3.5%) to $0.84 on light volume. Throughout the day, 15,437 shares of Guanwei Recycling exchanged hands as compared to its average daily volume of 73,700 shares. The stock ranged in price between $0.80-$0.87 after having opened the day at $0.87 as compared to the previous trading day's close of $0.87.

Guanwei Recycling Corp. manufactures and distributes low density polyethylene (LDPE) and other recycled plastics products primarily in the People's Republic of China and internationally. Guanwei Recycling has a market cap of $8.0 million and is part of the industrial goods sector. Shares are down 73.3% year-to-date as of the close of trading on Monday.

TheStreet Ratings rates Guanwei Recycling 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 generally disappointing historical performance in the stock itself.

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Highlights from TheStreet Ratings analysis on GPRC go as follows:

  • GUANWEI RECYCLING CORP has experienced a steep decline in earnings per share in the most recent quarter in comparison to its performance from the same quarter a year ago. The company has reported a trend of declining earnings per share over the past two years. During the past fiscal year, GUANWEI RECYCLING CORP reported lower earnings of $0.93 versus $1.13 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 Commercial Services & Supplies industry. The net income has significantly decreased by 68.0% when compared to the same quarter one year ago, falling from $2.37 million to $0.76 million.
  • 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. When compared to other companies in the Commercial Services & Supplies industry and the overall market, GUANWEI RECYCLING CORP's return on equity is below that of both the industry average and the S&P 500.
  • The gross profit margin for GUANWEI RECYCLING CORP is rather low; currently it is at 16.86%. It has decreased significantly from the same period last year. Along with this, the net profit margin of 6.41% significantly trails the industry average.
  • Despite any intermediate fluctuations, we have only bad news to report on this stock's performance over the last year: it has tumbled by 52.29%, worse than the S&P 500's performance. Consistent with the plunge in the stock price, the company's earnings per share are down 69.56% compared to the year-earlier 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: Guanwei Recycling 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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