3 Materials & Construction Stocks Nudging The Industry Higher

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.

All three major indices traded up today with the Dow Jones Industrial Average ( ^DJI) trading up 25 points (0.1%) at 17,157 as of Wednesday, Sept. 17, 2014, 4:20 PM ET. The NYSE advances/declines ratio sits at 1,585 issues advancing vs. 1,500 declining with 127 unchanged.

The Materials & Construction industry as a whole closed the day up 1.0% versus the S&P 500, which was up 0.1%. Top gainers within the Materials & Construction industry included Perma-Fix Environmental Services ( PESI), up 1.9%, Abengoa ( ABGB), up 1.9%, Goldfield ( GV), up 1.5%, UCP ( UCP), up 8.4% and Lennar ( LEN.B), up 6.3%.

TheStreet Ratings Group would like to highlight 3 stocks pushing the industry higher today:

UCP ( UCP) is one of the companies that pushed the Materials & Construction industry higher today. UCP was up $1.00 (8.4%) to $12.90 on heavy volume. Throughout the day, 59,368 shares of UCP exchanged hands as compared to its average daily volume of 38,100 shares. The stock ranged in a price between $12.30-$12.94 after having opened the day at $12.47 as compared to the previous trading day's close of $11.90.

UCP, Inc. operates as a homebuilder and land developer in California and Washington, the United States. The company operates in two segments, Homebuilding and Land Development. It designs, constructs, and sells single-family homes under the Benchmark Communities brand name. UCP has a market cap of $94.7 million and is part of the industrial goods sector. Shares are down 18.7% year-to-date as of the close of trading on Tuesday. Currently there are no analysts who rate UCP a buy, no analysts rate it a sell, and 1 rates 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 UCP as a hold. The company's strengths can be seen in multiple areas, such as its robust revenue growth, largely solid financial position with reasonable debt levels by most measures and notable return on equity. However, as a counter to these strengths, we also find weaknesses including poor profit margins and weak operating cash flow.

Highlights from TheStreet Ratings analysis on UCP go as follows:

  • UCP's very impressive revenue growth greatly exceeded the industry average of 6.0%. Since the same quarter one year prior, revenues leaped by 129.4%. This growth in revenue appears to have trickled down to the company's bottom line, improving the earnings per share.
  • The current debt-to-equity ratio, 0.52, is low and is below the industry average, implying that there has been successful management of debt levels.
  • Compared to other companies in the Household Durables industry and the overall market, UCP INC's return on equity significantly trails that of both the industry average and the S&P 500.
  • The gross profit margin for UCP INC is rather low; currently it is at 18.80%. It has decreased from the same quarter the previous year. Along with this, the net profit margin of 0.28% trails that of the industry average.
  • Net operating cash flow has significantly decreased to -$9.47 million or 409.41% when compared to the same quarter last year. In addition, when comparing to the industry average, the firm's growth rate is much lower.

You can view the full analysis from the report here: UCP 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.

At the close, Abengoa ( ABGB) was up $0.52 (1.9%) to $28.19 on heavy volume. Throughout the day, 40,960 shares of Abengoa exchanged hands as compared to its average daily volume of 12,600 shares. The stock ranged in a price between $28.19-$28.49 after having opened the day at $28.30 as compared to the previous trading day's close of $27.67.

Abengoa has a market cap of $4.5 billion and is part of the industrial goods sector. Shares are up 78.9% year-to-date as of the close of trading on Tuesday.

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

Perma-Fix Environmental Services ( PESI) was another company that pushed the Materials & Construction industry higher today. Perma-Fix Environmental Services was up $0.07 (1.9%) to $3.70 on light volume. Throughout the day, 2,738 shares of Perma-Fix Environmental Services exchanged hands as compared to its average daily volume of 15,100 shares. The stock ranged in a price between $3.61-$4.00 after having opened the day at $3.61 as compared to the previous trading day's close of $3.63.

Perma-Fix Environmental Services, Inc., through its subsidiaries, operates as an environmental and technology know-how company in the United States. It operates through two segments, Treatment and Services. Perma-Fix Environmental Services has a market cap of $42.2 million and is part of the industrial goods sector. Shares are up 16.7% year-to-date as of the close of trading on Tuesday. Currently there are no analysts who rate Perma-Fix Environmental Services a buy, no analysts rate it a sell, and 1 rates it a hold.

TheStreet Ratings rates Perma-Fix Environmental Services as a sell. The company's weaknesses can be seen in multiple areas, such as its disappointing return on equity, poor profit margins, weak operating cash flow and feeble growth in its earnings per share.

Highlights from TheStreet Ratings analysis on PESI 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 Commercial Services & Supplies industry and the overall market, PERMA-FIX ENVIRONMENTAL SVCS's return on equity significantly trails that of both the industry average and the S&P 500.
  • The gross profit margin for PERMA-FIX ENVIRONMENTAL SVCS is rather low; currently it is at 19.90%. It has decreased from the same quarter the previous year. Along with this, the net profit margin of 0.08% significantly trails the industry average.
  • Net operating cash flow has significantly decreased to -$4.38 million or 187.13% when compared to the same quarter last year. In addition, when comparing to the industry average, the firm's growth rate is much lower.
  • PERMA-FIX ENVIRONMENTAL SVCS 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. However, the consensus estimate suggests that this trend should reverse in the coming year. During the past fiscal year, PERMA-FIX ENVIRONMENTAL SVCS reported poor results of -$3.03 versus -$0.30 in the prior year. This year, the market expects an improvement in earnings (-$0.46 versus -$3.03).
  • The company, on the basis of net income growth from the same quarter one year ago, has significantly underperformed compared to the Commercial Services & Supplies industry average, but is greater than that of the S&P 500. The net income increased by 101.3% when compared to the same quarter one year prior, rising from -$0.88 million to $0.01 million.

You can view the full analysis from the report here: Perma-Fix Environmental Services 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.

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.

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