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 1.2% versus the S&P 500, which was down 0.6%. Laggards within the Materials & Construction industry included Skyline ( SKY), down 2.5%, Comstock ( CHCI), down 1.6%, Integrated Electrical Services ( IESC), down 3.0%, James Hardie Industries ( JHX), down 2.1% and Abengoa ( ABGB), down 2.8%.

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 $1.24 (2.1%) to $57.35 on average volume. Throughout the day, 2,868 shares of James Hardie Industries exchanged hands as compared to its average daily volume of 2,800 shares. The stock ranged in price between $57.35-$58.42 after having opened the day at $58.42 as compared to the previous trading day's close of $58.59.

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 $5.2 billion and is part of the utilities sector. Shares are up 2.1% year-to-date as of the close of trading on Thursday.

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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, Integrated Electrical Services ( IESC) was down $0.24 (3.0%) to $7.62 on average volume. Throughout the day, 16,043 shares of Integrated Electrical Services exchanged hands as compared to its average daily volume of 15,000 shares. The stock ranged in price between $7.50-$8.16 after having opened the day at $7.91 as compared to the previous trading day's close of $7.86.

Integrated Electrical Services, Inc., through its subsidiaries, provides communications, residential, commercial and industrial, and infrastructure solutions in the United States. Integrated Electrical Services has a market cap of $173.7 million and is part of the utilities sector. Shares are up 45.8% year-to-date as of the close of trading on Thursday.

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TheStreet Ratings rates Integrated Electrical Services as a buy. 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, impressive record of earnings per share growth, compelling growth in net income and good cash flow from operations. We feel these strengths outweigh the fact that the company shows low profit margins.

Highlights from TheStreet Ratings analysis on IESC go as follows:

  • The revenue growth came in higher than the industry average of 11.6%. Since the same quarter one year prior, revenues rose by 12.0%. Growth in the company's revenue appears to have helped boost the earnings per share.
  • IESC's debt-to-equity ratio is very low at 0.17 and is currently below that of the industry average, implying that there has been very successful management of debt levels. Along with the favorable debt-to-equity ratio, the company maintains an adequate quick ratio of 1.19, which illustrates the ability to avoid short-term cash problems.
  • INTEGRATED ELECTRICAL SVCS reported significant earnings per share improvement 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 two years. During the past fiscal year, INTEGRATED ELECTRICAL SVCS continued to lose money by earning -$0.14 versus -$0.18 in the prior year.
  • The net income growth from the same quarter one year ago has significantly exceeded that of the S&P 500 and the Construction & Engineering industry. The net income increased by 334.9% when compared to the same quarter one year prior, rising from -$1.14 million to $2.67 million.
  • Net operating cash flow has increased to $3.13 million or 21.03% when compared to the same quarter last year. The firm also exceeded the industry average cash flow growth rate of -18.52%.

You can view the full analysis from the report here: Integrated Electrical Services Ratings Report

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Comstock ( CHCI) was another company that pushed the Materials & Construction industry lower today. Comstock was down $0.02 (1.6%) to $1.21 on light volume. Throughout the day, 21,838 shares of Comstock exchanged hands as compared to its average daily volume of 51,300 shares. The stock ranged in price between $1.19-$1.22 after having opened the day at $1.20 as compared to the previous trading day's close of $1.23.

Comstock Holding Companies, Inc. operates as a real estate development and construction services company in the United States. The company operates through three segments: Homebuilding, Multi-family, and Real Estate Services. Comstock has a market cap of $23.0 million and is part of the utilities sector. Shares are down 39.0% year-to-date as of the close of trading on Thursday.

TheStreet Ratings rates Comstock as a sell. The company's weaknesses can be seen in multiple areas, such as its unimpressive growth in net income, generally high debt management risk, 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 CHCI go as follows:

  • 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 Household Durables industry. The net income has significantly decreased by 98.6% when compared to the same quarter one year ago, falling from -$0.84 million to -$1.66 million.
  • The debt-to-equity ratio is very high at 28.16 and currently higher than the industry average, implying increased risk associated with the management of debt levels within the company.
  • 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 Household Durables industry and the overall market, COMSTOCK HOLDING COS INC's return on equity significantly trails that of both the industry average and the S&P 500.
  • The gross profit margin for COMSTOCK HOLDING COS INC is rather low; currently it is at 19.12%. Regardless of CHCI's low profit margin, it has managed to increase from the same period last year. Despite the mixed results of the gross profit margin, CHCI's net profit margin of -14.10% significantly underperformed when compared to 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 37.83%, worse than the S&P 500's performance. Consistent with the plunge in the stock price, the company's earnings per share are down 100.00% 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: Comstock 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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