3 Materials & Construction Stocks Moving The Industry Upward

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.

One out of the three major indices traded up today The three major indices are trading lower today with the Dow Jones Industrial Average ( ^DJI) trading down 25.91 points (-0.1%) at 17,627 as of Friday, Nov. 14, 2014, 1:25 PM ET. The NYSE advances/declines ratio sits at 1,592 issues advancing vs. 1,405 declining with 178 unchanged.

The Materials & Construction industry as a whole closed the day down 0.1% versus the S&P 500, which was unchanged. Top gainers within the Materials & Construction industry included Jewett-Cameron Trading ( JCTCF), up 4.6%, Aspen Aerogels ( ASPN), up 1.8%, Xinyuan Real Estate ( XIN), up 11.3%, Sharps Compliance ( SMED), up 4.2% and Great Lakes Dredge & Dock ( GLDD), up 2.2%.

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

Sharps Compliance ( SMED) is one of the companies that pushed the Materials & Construction industry higher today. Sharps Compliance was up $0.18 (4.2%) to $4.43 on average volume. Throughout the day, 143,259 shares of Sharps Compliance exchanged hands as compared to its average daily volume of 184,100 shares. The stock ranged in a price between $4.19-$4.52 after having opened the day at $4.25 as compared to the previous trading day's close of $4.25.

Sharps Compliance Corp. provides management solutions and services for medical waste, used healthcare materials, and patient dispensed unused or expired medications in the United States. Sharps Compliance has a market cap of $64.7 million and is part of the industrial goods sector. Shares are down 10.4% year-to-date as of the close of trading on Thursday. Currently there are 3 analysts who rate Sharps Compliance a buy, no analysts rate it a sell, and none rate it a hold.

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TheStreet Ratings rates Sharps Compliance 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 notable return on equity. However, as a counter to these strengths, we also find weaknesses including a generally disappointing performance in the stock itself, unimpressive growth in net income and poor profit margins.

Highlights from TheStreet Ratings analysis on SMED go as follows:

  • Despite its growing revenue, the company underperformed as compared with the industry average of 19.7%. Since the same quarter one year prior, revenues rose by 12.3%. This growth in revenue does not appear to have trickled down to the company's bottom line, displayed by a decline in earnings per share.
  • SMED 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 4.45, which clearly demonstrates the ability to cover short-term cash needs.
  • The share price of SHARPS COMPLIANCE CORP has not done very well: it is down 7.73% and has underperformed the S&P 500, in part reflecting the company's sharply declining earnings per share when compared to the year-earlier quarter. Looking ahead, other than the push or pull of the broad market, we do not see anything in the company's numbers that may help reverse the decline experienced over the past 12 months. Despite the past decline, the stock is still selling for more than most others in its industry.
  • The gross profit margin for SHARPS COMPLIANCE CORP is currently lower than what is desirable, coming in at 31.91%. It has decreased from the same quarter the previous year. Along with this, the net profit margin of -1.05% trails that of the industry average.

You can view the full analysis from the report here: Sharps Compliance Ratings Report

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At the close, Xinyuan Real Estate ( XIN) was up $0.25 (11.3%) to $2.48 on heavy volume. Throughout the day, 737,239 shares of Xinyuan Real Estate exchanged hands as compared to its average daily volume of 285,400 shares. The stock ranged in a price between $2.21-$2.50 after having opened the day at $2.23 as compared to the previous trading day's close of $2.23.

Xinyuan Real Estate Co., Ltd., together with its subsidiaries, develops residential real estate properties for middle-income consumers, primarily focusing on selected Tier II and III cities in China. Xinyuan Real Estate has a market cap of $191.4 million and is part of the industrial goods sector. Shares are down 58.3% year-to-date as of the close of trading on Thursday. Currently there are no analysts who rate Xinyuan Real Estate a buy, no analysts rate 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 Xinyuan Real Estate as a hold. Among the primary strengths of the company is its attractive valuation levels, considering its current price compared to earnings, book value and other measures. At the same time, however, we also find weaknesses including feeble growth in the company's earnings per share, deteriorating net income and disappointing return on equity.

Highlights from TheStreet Ratings analysis on XIN go as follows:

  • The revenue fell significantly faster than the industry average of 7.3%. Since the same quarter one year prior, revenues fell by 32.0%. Weakness in the company's revenue seems to have hurt the bottom line, decreasing earnings per share.
  • Despite the current debt-to-equity ratio of 1.51, it is still below the industry average, suggesting that this level of debt is acceptable within the Real Estate Management & Development industry. Despite the fact that XIN's debt-to-equity ratio is mixed in its results, the company's quick ratio of 0.63 is low and demonstrates weak liquidity.
  • Current return on equity is lower than its ROE from the same quarter one year prior. This is a clear sign of weakness within the company. In comparison to the other companies in the Real Estate Management & Development industry and the overall market, XINYUAN REAL ESTATE CO -ADR's return on equity is significantly below that of the industry average and is below that of the S&P 500.
  • The gross profit margin for XINYUAN REAL ESTATE CO -ADR is currently lower than what is desirable, coming in at 26.56%. It has decreased from the same quarter the previous year. Along with this, the net profit margin of 4.75% trails that of the industry average.

You can view the full analysis from the report here: Xinyuan Real Estate 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.

Aspen Aerogels ( ASPN) was another company that pushed the Materials & Construction industry higher today. Aspen Aerogels was up $0.14 (1.8%) to $7.81 on light volume. Throughout the day, 15,296 shares of Aspen Aerogels exchanged hands as compared to its average daily volume of 56,300 shares. The stock ranged in a price between $7.65-$7.85 after having opened the day at $7.79 as compared to the previous trading day's close of $7.67.

Aspen Aerogels has a market cap of $178.2 million and is part of the industrial goods sector. Shares are unchanged year-to-date as of the close of trading on Thursday.

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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