3 Basic Materials Stocks Driving The Sector Higher

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.

Two out of the three major indices are trading lower today with the Dow Jones Industrial Average ( ^DJI) trading down 78.22 points (-0.4%) at 17,774 as of Tuesday, Dec. 9, 2014, 3:25 PM ET. The NYSE advances/declines ratio sits at 1,227 issues advancing vs. 1,763 declining with 144 unchanged.

The Basic Materials sector as a whole closed the day up 2.7% versus the S&P 500, which was down 0.2%. Top gainers within the Basic Materials sector included Atlatsa Resources ( ATL), up 5.9%, Minco Gold ( MGH), up 3.6%, Alderon Iron Ore ( AXX), up 3.2%, Quest Rare Minerals ( QRM), up 4.0% and Entree Gold ( EGI), up 11.4%.

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

Quest Rare Minerals ( QRM) is one of the companies that pushed the Basic Materials sector higher today. Quest Rare Minerals was up $0.00 (4.0%) to $0.13 on light volume. Throughout the day, 46,259 shares of Quest Rare Minerals exchanged hands as compared to its average daily volume of 98,800 shares. The stock ranged in a price between $0.11-$0.13 after having opened the day at $0.12 as compared to the previous trading day's close of $0.12.

Quest Rare Minerals has a market cap of $9.7 million and is part of the energy industry. Shares are down 73.8% year-to-date as of the close of trading on Monday.

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, Alderon Iron Ore ( AXX) was up $0.01 (3.2%) to $0.24 on average volume. Throughout the day, 47,363 shares of Alderon Iron Ore exchanged hands as compared to its average daily volume of 49,400 shares. The stock ranged in a price between $0.23-$0.24 after having opened the day at $0.24 as compared to the previous trading day's close of $0.23.

Alderon Iron Ore has a market cap of $32.5 million and is part of the energy industry. Shares are down 84.1% year-to-date as of the close of trading on Monday.

STOCKS TO BUY: TheStreet Quant Ratings has identified a handful of stocks that can potentially TRIPLE in the next 12 months. Learn more.

Atlatsa Resources ( ATL) was another company that pushed the Basic Materials sector higher today. Atlatsa Resources was up $0.01 (5.9%) to $0.18 on light volume. Throughout the day, 13,923 shares of Atlatsa Resources exchanged hands as compared to its average daily volume of 45,800 shares. The stock ranged in a price between $0.17-$0.18 after having opened the day at $0.17 as compared to the previous trading day's close of $0.17.

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 $98.6 million and is part of the energy industry. Shares are down 69.1% 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 compelling growth in net income. However, as a counter to these strengths, we also find weaknesses including poor profit margins and a generally disappointing performance in the stock itself.

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 3.4%. Since the same quarter one year prior, revenues rose by 29.9%. This growth in revenue appears to have trickled down to the company's bottom line, improving the earnings per share.
  • ATLATSA RESOURCES CORP reported significant earnings per share improvement in the most recent quarter compared to the same quarter a year ago. The company has demonstrated a pattern of positive earnings per share growth over the past year. During the past fiscal year, ATLATSA RESOURCES CORP turned its bottom line around by earning $0.47 versus -$0.04 in the prior year.
  • 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 63.27%, 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 rather low; currently it is at 19.10%. Despite the low profit margin, it has increased significantly from the same period last year. Despite the mixed results of the gross profit margin, ATL's net profit margin of -0.73% significantly underperformed when compared to 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.

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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