3 Stocks Pushing The Chemicals 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 Chemicals industry as a whole closed the day down 2.2% versus the S&P 500, which was down 1.6%. Laggards within the Chemicals industry included Methes Energies International ( MEIL), down 3.0%, Ceres ( CERE), down 4.3%, NL Industries ( NL), down 6.4%, Gulf Resources ( GURE), down 6.5% and Oil-Dri Corp of America ( ODC), down 4.0%.

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

Gulf Resources ( GURE) is one of the companies that pushed the Chemicals industry lower today. Gulf Resources was down $0.11 (6.5%) to $1.59 on average volume. Throughout the day, 117,948 shares of Gulf Resources exchanged hands as compared to its average daily volume of 99,400 shares. The stock ranged in price between $1.56-$1.67 after having opened the day at $1.67 as compared to the previous trading day's close of $1.70.

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 $67.0 million and is part of the basic materials sector. Shares are down 26.4% year-to-date as of the close of trading on Wednesday.

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 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 stock has experienced relatively poor performance when compared with the S&P 500 during the past year.

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.
  • GULF RESOURCES INC reported flat earnings per share in the most recent quarter. This company has not demonstrated a clear trend in earnings over the past 2 years, making it difficult to accurately predict earnings for the coming year. During the past fiscal year, GULF RESOURCES INC increased its bottom line by earning $0.54 versus $0.43 in the prior year.
  • In its most recent trading session, GURE has closed at a price level that was not very different from its closing price of one year earlier. This is probably due to its weak earnings growth as well as other mixed factors. 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.
  • 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.

At the close, NL Industries ( NL) was down $0.49 (6.4%) to $7.20 on average volume. Throughout the day, 20,822 shares of NL Industries exchanged hands as compared to its average daily volume of 18,600 shares. The stock ranged in price between $7.15-$7.63 after having opened the day at $7.62 as compared to the previous trading day's close of $7.69.

NL Industries, Inc., through its subsidiary, CompX International Inc., operates in the component products industry in the United States and internationally. NL Industries has a market cap of $376.8 million and is part of the basic materials sector. Shares are down 31.2% year-to-date as of the close of trading on Wednesday. Currently there are no analysts who rate NL Industries a buy, 1 analyst rates it a sell, and none rate 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 NL Industries as a hold. 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 and expanding profit margins. However, as a counter to these strengths, we also find weaknesses including disappointing return on equity and a generally disappointing performance in the stock itself.

Highlights from TheStreet Ratings analysis on NL go as follows:

  • NL's revenue growth has slightly outpaced the industry average of 4.1%. Since the same quarter one year prior, revenues rose by 11.7%. Growth in the company's revenue appears to have helped boost the earnings per share.
  • NL has no debt to speak of therefore resulting in a debt-to-equity ratio of zero, which we consider to be a relatively favorable sign. Along with this, the company maintains a quick ratio of 2.74, which clearly demonstrates the ability to cover short-term cash needs.
  • NL INDUSTRIES reported significant earnings per share improvement 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, NL INDUSTRIES swung to a loss, reporting -$1.13 versus $1.16 in the prior year. This year, the market expects an improvement in earnings ($0.45 versus -$1.13).
  • NL has underperformed the S&P 500 Index, declining 22.81% from its price level of one year ago. The fact that the stock is now selling for less than others in its industry in relation to its current earnings is not reason enough to justify a buy rating at this time.
  • 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, NL INDUSTRIES's return on equity significantly trails that of both the industry average and the S&P 500.

You can view the full analysis from the report here: NL Industries 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.

Ceres ( CERE) was another company that pushed the Chemicals industry lower today. Ceres was down $0.02 (4.3%) to $0.45 on light volume. Throughout the day, 97,423 shares of Ceres exchanged hands as compared to its average daily volume of 265,400 shares. The stock ranged in price between $0.42-$0.47 after having opened the day at $0.45 as compared to the previous trading day's close of $0.47.

Ceres, Inc., an agricultural biotechnology company, develops and sells energy crops to produce renewable bioenergy feedstocks in North America. Ceres has a market cap of $22.4 million and is part of the basic materials sector. Shares are down 66.3% year-to-date as of the close of trading on Wednesday. Currently there are 2 analysts who rate Ceres a buy, no analysts rate it a sell, and none rate it a hold.

TheStreet Ratings rates Ceres 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 CERE 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 Oil, Gas & Consumable Fuels industry and the overall market, CERES INC's return on equity significantly trails that of both the industry average and the S&P 500.
  • CERE'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 59.84%, 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 3.1%. Since the same quarter one year prior, revenues fell by 40.5%. The declining revenue has not hurt the company's bottom line, with increasing earnings per share.
  • CERES INC reported significant earnings per share improvement 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, CERES INC reported poor results of -$1.31 versus -$1.22 in the prior year. This year, the market expects an improvement in earnings (-$0.61 versus -$1.31).
  • The net income growth from the same quarter one year ago has exceeded that of the S&P 500, but is less than that of the Oil, Gas & Consumable Fuels industry average. The net income increased by 17.1% when compared to the same quarter one year prior, going from -$9.32 million to -$7.73 million.

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

If you liked this article you might like

3 Stocks Pushing The Chemicals Industry Lower

3 Stocks Pushing The Chemicals Industry Lower

3 Chemicals Stocks Nudging The Industry Higher

3 Chemicals Stocks Nudging The Industry Higher

3 Stocks Improving Performance Of The Chemicals Industry

3 Stocks Improving Performance Of The Chemicals Industry

3 Stocks Pushing The Chemicals Industry Lower

3 Stocks Pushing The Chemicals Industry Lower

Gulf Resources (GURE): Today's Weak On High Volume Stock

Gulf Resources (GURE): Today's Weak On High Volume Stock