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 1.3% versus the S&P 500, which was unchanged. Laggards within the Materials & Construction industry included Avalon Holdings ( AWX), down 1.8%, Comstock ( CHCI), down 5.2%, Pope Resources ( POPE), down 1.7%, Pure Cycle ( PCYO), down 2.3% and Abengoa ( ABGB), down 11.6%.

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

Abengoa ( ABGB) is one of the companies that pushed the Materials & Construction industry lower today. Abengoa was down $1.95 (11.6%) to $14.85 on heavy volume. Throughout the day, 99,281 shares of Abengoa exchanged hands as compared to its average daily volume of 25,000 shares. The stock ranged in price between $14.36-$15.50 after having opened the day at $15.50 as compared to the previous trading day's close of $16.80.

Abengoa has a market cap of $3.1 billion and is part of the industrial goods sector. Shares are up 11.4% year-to-date as of the close of trading on Wednesday. Currently there are no analysts who rate Abengoa a buy, no analysts rate it a sell, and 1 rates it a hold.

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At the close, Pure Cycle ( PCYO) was down $0.12 (2.3%) to $5.13 on light volume. Throughout the day, 22,031 shares of Pure Cycle exchanged hands as compared to its average daily volume of 42,800 shares. The stock ranged in price between $5.09-$5.28 after having opened the day at $5.23 as compared to the previous trading day's close of $5.25.

Pure Cycle Corporation designs, constructs, operates, and maintains water and wastewater systems in the Denver metropolitan area. Pure Cycle has a market cap of $127.9 million and is part of the industrial goods sector. Shares are down 17.1% year-to-date as of the close of trading on Wednesday. Currently there is 1 analyst who rates Pure Cycle a buy, no analysts rate it a sell, and none rate it a hold.

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TheStreet Ratings rates Pure Cycle 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 impressive record of earnings per share growth. However, as a counter to these strengths, we find that the stock has had a generally disappointing performance in the past year.

Highlights from TheStreet Ratings analysis on PCYO go as follows:

  • PCYO's very impressive revenue growth greatly exceeded the industry average of 7.8%. Since the same quarter one year prior, revenues leaped by 64.4%. This growth in revenue appears to have trickled down to the company's bottom line, improving the earnings per share.
  • PCYO's debt-to-equity ratio is very low at 0.05 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 3.48, which clearly demonstrates the ability to cover short-term cash needs.
  • The gross profit margin for PURE CYCLE CORP is currently very high, coming in at 79.82%. It has increased from the same quarter the previous year. Regardless of the strong results of the gross profit margin, the net profit margin of -56.25% is in-line with the industry average.
  • 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 Water Utilities industry and the overall market, PURE CYCLE CORP's return on equity significantly trails that of both the industry average and the S&P 500.
  • In its most recent trading session, PCYO 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.

You can view the full analysis from the report here: Pure Cycle Ratings Report

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Comstock ( CHCI) was another company that pushed the Materials & Construction industry lower today. Comstock was down $0.06 (5.2%) to $1.01 on heavy volume. Throughout the day, 105,284 shares of Comstock exchanged hands as compared to its average daily volume of 60,900 shares. The stock ranged in price between $0.96-$1.07 after having opened the day at $1.03 as compared to the previous trading day's close of $1.07.

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 $20.1 million and is part of the industrial goods sector. Shares are down 46.5% year-to-date as of the close of trading on Wednesday.

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 58.30%, 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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