3 Stocks Pushing The Chemicals Industry Lower

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The Chemicals industry as a whole closed the day down 1.0% versus the S&P 500, which was down 0.1%. Laggards within the Chemicals industry included Ikonics ( IKNX), down 3.4%, Methes Energies International ( MEIL), down 5.5%, Metabolix ( MBLX), down 11.2%, Gulf Resources ( GURE), down 3.1% and Gevo ( GEVO), down 4.9%.

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

Gevo ( GEVO) is one of the companies that pushed the Chemicals industry lower today. Gevo was down $0.02 (4.9%) to $0.43 on average volume. Throughout the day, 992,687 shares of Gevo exchanged hands as compared to its average daily volume of 817,500 shares. The stock ranged in price between $0.43-$0.46 after having opened the day at $0.46 as compared to the previous trading day's close of $0.46.

Gevo, Inc., a renewable chemicals and biofuels company, focuses primarily on the production and sale of isobutanol and related products from renewable feedstocks. Gevo has a market cap of $32.9 million and is part of the basic materials sector. Shares are down 68.2% year-to-date as of the close of trading on Friday. Currently there are 2 analysts who rate Gevo a buy, no analysts rate it a sell, and none rate it a hold.

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TheStreet Ratings rates Gevo as a sell. The company's weaknesses can be seen in multiple areas, such as its deteriorating net income, generally high debt management risk, disappointing return on equity, weak operating cash flow and generally disappointing historical performance in the stock itself.

Highlights from TheStreet Ratings analysis on GEVO go as follows:

  • The company, on the basis of change in net income from the same quarter one year ago, has underperformed when compared to that of the S&P 500 and greatly underperformed compared to the Oil, Gas & Consumable Fuels industry average. The net income has decreased by 12.7% when compared to the same quarter one year ago, dropping from -$15.22 million to -$17.16 million.
  • The debt-to-equity ratio of 1.03 is relatively high when compared with the industry average, suggesting a need for better debt level management. To add to this, GEVO has a quick ratio of 0.68, this demonstrates the lack of ability of the company to cover short-term liquidity needs.
  • 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 Oil, Gas & Consumable Fuels industry and the overall market, GEVO INC's return on equity significantly trails that of both the industry average and the S&P 500.
  • Net operating cash flow has decreased to -$12.23 million or 20.16% when compared to the same quarter last year. In addition, when comparing the cash generation rate to the industry average, the firm's growth is significantly lower.
  • GEVO's stock share price has done very poorly compared to where it was a year ago: Despite any rallies, the net result is that it is down by 73.96%, which is also worse that the performance of the S&P 500 Index. Investors have so far failed to pay much attention to the earnings improvements the company has managed to achieve over the last 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: Gevo Ratings Report

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At the close, Gulf Resources ( GURE) was down $0.06 (3.1%) to $1.88 on average volume. Throughout the day, 89,683 shares of Gulf Resources exchanged hands as compared to its average daily volume of 100,300 shares. The stock ranged in price between $1.88-$1.96 after having opened the day at $1.96 as compared to the previous trading day's close of $1.94.

Gulf Resources, Inc., together with its subsidiaries, manufactures and trades in bromine and crude salt products in the People's Republic of China. It operates in three segments: Bromine, Crude Salt, and Chemical Products. Gulf Resources has a market cap of $75.1 million and is part of the basic materials sector. Shares are down 17.4% year-to-date as of the close of trading on Friday.

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TheStreet Ratings rates Gulf Resources as a hold. The company's strengths can be seen in multiple areas, such as its increase in net income, largely solid financial position with reasonable debt levels by most measures and attractive valuation levels. However, as a counter to these strengths, we find that the company's revenue growth has not been good.

Highlights from TheStreet Ratings analysis on GURE go as follows:

  • The net income growth from the same quarter one year ago has exceeded that of the S&P 500 and the Chemicals industry average. The net income increased by 5.8% when compared to the same quarter one year prior, going from $5.36 million to $5.67 million.
  • GURE's debt-to-equity ratio is very low at 0.01 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 15.16, which clearly demonstrates the ability to cover short-term cash needs.
  • Compared to where it was 12 months ago, the stock is up, but it has so far lagged the appreciation in the S&P 500. Despite the fact that it has already risen in the past year, there is currently no conclusive evidence that warrants the purchase or sale of this stock.
  • GURE, with its decline in revenue, underperformed when compared the industry average of 7.8%. Since the same quarter one year prior, revenues slightly dropped by 3.3%. Weakness in the company's revenue seems to not be hurting the bottom line, shown by stable earnings per share.
  • 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. In comparison to the other companies in the Chemicals industry and the overall market, GULF RESOURCES 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: Gulf Resources 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.

Metabolix ( MBLX) was another company that pushed the Chemicals industry lower today. Metabolix was down $0.11 (11.2%) to $0.87 on average volume. Throughout the day, 162,830 shares of Metabolix exchanged hands as compared to its average daily volume of 189,300 shares. The stock ranged in price between $0.87-$1.01 after having opened the day at $0.99 as compared to the previous trading day's close of $0.98.

Metabolix, Inc., a bioscience company, focuses on delivering sustainable solutions to the plastics and chemicals industries. It produces a family of biopolymers found in nature called polyhydroxyalkanoates, which occur naturally in living organisms and are chemically similar to polyesters. Metabolix has a market cap of $35.4 million and is part of the basic materials sector. Shares are down 22.2% year-to-date as of the close of trading on Friday. Currently there are no analysts who rate Metabolix a buy, no analysts rate it a sell, and 2 rate it a hold.

TheStreet Ratings rates Metabolix 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.

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 MBLX 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 Chemicals industry and the overall market, METABOLIX INC's return on equity significantly trails that of both the industry average and the S&P 500.
  • MBLX's stock share price has done very poorly compared to where it was a year ago: Despite any rallies, the net result is that it is down by 34.36%, which is also worse that the performance of the S&P 500 Index. Investors have so far failed to pay much attention to the earnings improvements the company has managed to achieve over the last 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.
  • The revenue fell significantly faster than the industry average of 7.8%. Since the same quarter one year prior, revenues fell by 31.4%. The declining revenue has not hurt the company's bottom line, with increasing earnings per share.
  • METABOLIX INC has improved earnings per share by 8.7% in the most recent quarter compared to the same quarter a year ago. This company has reported somewhat volatile earnings recently. But, we feel it is poised for EPS growth in the coming year. During the past fiscal year, METABOLIX INC swung to a loss, reporting -$0.88 versus $0.10 in the prior year. This year, the market expects an improvement in earnings (-$0.83 versus -$0.88).
  • The net income growth from the same quarter one year ago has exceeded that of the S&P 500 and the Chemicals industry average. The net income increased by 8.0% when compared to the same quarter one year prior, going from -$7.87 million to -$7.24 million.

You can view the full analysis from the report here: Metabolix 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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