3 Stocks Pushing The Basic Materials Sector Lower

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The Basic Materials sector as a whole closed the day down 2.4% versus the S&P 500, which was down 1.6%. Laggards within the Basic Materials sector included New Concept Energy ( GBR), down 7.0%, Mines Management ( MGN), down 4.8%, PostRock Energy ( PSTR), down 5.0%, Solitario Exploration & Royalty ( XPL), down 2.9% and FieldPoint Petroleum ( FPP), down 1.8%.

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

Solitario Exploration & Royalty ( XPL) is one of the companies that pushed the Basic Materials sector lower today. Solitario Exploration & Royalty was down $0.03 (2.9%) to $1.01 on heavy volume. Throughout the day, 58,017 shares of Solitario Exploration & Royalty exchanged hands as compared to its average daily volume of 31,400 shares. The stock ranged in price between $1.01-$1.02 after having opened the day at $1.01 as compared to the previous trading day's close of $1.04.

Solitario Exploration & Royalty has a market cap of $45.5 million and is part of the energy industry. Shares are up 22.3% year-to-date as of the close of trading on Friday. Currently there is 1 analyst who rates Solitario Exploration & Royalty a buy, no analysts rate it a sell, and none rate it a hold.

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At the close, PostRock Energy ( PSTR) was down $0.05 (5.0%) to $0.95 on light volume. Throughout the day, 20,886 shares of PostRock Energy exchanged hands as compared to its average daily volume of 29,100 shares. The stock ranged in price between $0.95-$1.00 after having opened the day at $0.99 as compared to the previous trading day's close of $1.00.

PostRock Energy Corporation, an independent oil and gas company, is engaged in the acquisition, exploration, development, production, and gathering of crude oil and natural gas. PostRock Energy has a market cap of $31.1 million and is part of the energy industry. Shares are down 12.9% year-to-date as of the close of trading on Friday.

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TheStreet Ratings rates PostRock Energy 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 and generally disappointing historical performance in the stock itself.

Highlights from TheStreet Ratings analysis on PSTR 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 Oil, Gas & Consumable Fuels industry. The net income has significantly decreased by 187.0% when compared to the same quarter one year ago, falling from $6.88 million to -$5.99 million.
  • Currently the debt-to-equity ratio of 1.62 is quite high overall and when compared to the industry average, suggesting that the current management of debt levels should be re-evaluated. Along with this, the company manages to maintain a quick ratio of 0.43, which clearly demonstrates the inability to cover short-term cash needs.
  • Despite any intermediate fluctuations, we have only bad news to report on this stock's performance over the last year: it has tumbled by 29.87%, worse than the S&P 500's performance. Consistent with the plunge in the stock price, the company's earnings per share are down 276.92% 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.
  • The company's current return on equity greatly increased when compared to its ROE from the same quarter one year prior. This is a signal of significant strength within the corporation. Compared to other companies in the Oil, Gas & Consumable Fuels industry and the overall market, POSTROCK ENERGY CORP's return on equity significantly trails that of both the industry average and the S&P 500.
  • POSTROCK ENERGY CORP 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. But, we feel it is poised for EPS growth in the coming year. During the past fiscal year, POSTROCK ENERGY CORP continued to lose money by earning -$0.93 versus -$3.99 in the prior year. This year, the market expects an improvement in earnings (-$0.78 versus -$0.93).

You can view the full analysis from the report here: PostRock Energy Ratings Report

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Mines Management ( MGN) was another company that pushed the Basic Materials sector lower today. Mines Management was down $0.03 (4.8%) to $0.50 on light volume. Throughout the day, 24,700 shares of Mines Management exchanged hands as compared to its average daily volume of 47,100 shares. The stock ranged in price between $0.50-$0.55 after having opened the day at $0.53 as compared to the previous trading day's close of $0.53.

Mines Management, Inc., together with its subsidiaries, acquires, explores, and develops various mineral properties in North and South America. The company explores for silver, and associated base and precious metals. Mines Management has a market cap of $16.6 million and is part of the energy industry. Shares are down 6.7% year-to-date as of the close of trading on Friday.

TheStreet Ratings rates Mines Management 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.

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Highlights from TheStreet Ratings analysis on MGN 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 Metals & Mining industry and the overall market, MINES MANAGEMENT INC's return on equity significantly trails that of both the industry average and the S&P 500.
  • In its most recent trading session, MGN 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. 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.
  • The company, on the basis of net income growth from the same quarter one year ago, has underperformed when compared to that of the S&P 500 and greatly underperformed compared to the Metals & Mining industry average. The net income increased by 0.8% when compared to the same quarter one year prior, going from -$1.84 million to -$1.82 million.
  • MINES MANAGEMENT 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, MINES MANAGEMENT INC continued to lose money by earning -$0.25 versus -$0.28 in the prior year.
  • Net operating cash flow has increased to -$1.42 million or 17.52% when compared to the same quarter last year. The firm also exceeded the industry average cash flow growth rate of -9.24%.

You can view the full analysis from the report here: Mines Management Ratings Report

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