3 Stocks Pushing The Materials & Construction Industry Lower

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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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