3 Stocks Pushing The Basic Materials Sector 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 Basic Materials sector as a whole closed the day down 0.6% versus the S&P 500, which was unchanged. Laggards within the Basic Materials sector included Atlatsa Resources ( ATL), down 4.1%, Pacific Booker Minerals ( PBM), down 6.0%, Entree Gold ( EGI), down 7.6%, Alderon Iron Ore ( AXX), down 3.2% and PostRock Energy ( PSTR), down 16.9%.

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

Alderon Iron Ore ( AXX) is one of the companies that pushed the Basic Materials sector lower today. Alderon Iron Ore was down $0.01 (3.2%) to $0.34 on average volume. Throughout the day, 35,120 shares of Alderon Iron Ore exchanged hands as compared to its average daily volume of 44,500 shares. The stock ranged in price between $0.34-$0.36 after having opened the day at $0.35 as compared to the previous trading day's close of $0.35.

Alderon Iron Ore has a market cap of $46.2 million and is part of the energy industry. Shares are down 77.4% year-to-date as of the close of trading on Monday. Currently there are 3 analysts who rate Alderon Iron Ore a buy, no analysts rate it a sell, and none rate it a hold.

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At the close, Entree Gold ( EGI) was down $0.02 (7.6%) to $0.21 on light volume. Throughout the day, 3,400 shares of Entree Gold exchanged hands as compared to its average daily volume of 61,000 shares. The stock ranged in price between $0.21-$0.23 after having opened the day at $0.22 as compared to the previous trading day's close of $0.23.

Entree Gold has a market cap of $34.0 million and is part of the energy industry. Shares are down 17.5% year-to-date as of the close of trading on Monday.

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Atlatsa Resources ( ATL) was another company that pushed the Basic Materials sector lower today. Atlatsa Resources was down $0.01 (4.1%) to $0.19 on average volume. Throughout the day, 36,167 shares of Atlatsa Resources exchanged hands as compared to its average daily volume of 38,000 shares. The stock ranged in price between $0.18-$0.19 after having opened the day at $0.19 as compared to the previous trading day's close of $0.20.

Atlatsa Resources Corporation mines, explores for, and develops platinum group metals properties in South Africa. The company primarily explores for platinum, palladium, rhodium, gold, copper, and nickel. Atlatsa Resources has a market cap of $95.3 million and is part of the energy industry. Shares are down 70.1% year-to-date as of the close of trading on Monday. Currently there are no analysts who rate Atlatsa Resources a buy, 1 analyst rates it a sell, and none rate it a hold.

TheStreet Ratings rates Atlatsa Resources as a hold. The company's strengths can be seen in multiple areas, such as its notable return on equity, robust revenue growth and impressive record of earnings per share growth. However, as a counter to these strengths, we also find weaknesses including poor profit margins and a generally disappointing performance in the stock itself.

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Highlights from TheStreet Ratings analysis on ATL go as follows:

  • Compared to other companies in the Metals & Mining industry and the overall market, ATLATSA RESOURCES CORP's return on equity significantly exceeds that of both the industry average and the S&P 500.
  • The revenue growth came in higher than the industry average of 3.0%. Since the same quarter one year prior, revenues rose by 20.9%. This growth in revenue appears to have trickled down to the company's bottom line, improving the earnings per share.
  • Despite currently having a low debt-to-equity ratio of 0.49, it is higher than that of the industry average, inferring that management of debt levels may need to be evaluated further. Regardless of the somewhat mixed results with the debt-to-equity ratio, the company's quick ratio of 0.83 is weak.
  • ATL'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 66.00%, 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 gross profit margin for ATLATSA RESOURCES CORP is currently extremely low, coming in at 4.14%. It has decreased from the same quarter the previous year. Along with this, the net profit margin of -11.90% is significantly below that of the industry average.

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

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