3 Chemicals Stocks Driving The Industry 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.

All three major indices are trading down today with the Dow Jones Industrial Average ( ^DJI) trading down 170.50 points (-1.0%) at 17,737 as of Friday, Jan. 9, 2015, 4:20 PM ET. The NYSE advances/declines ratio sits at 1,146 issues advancing vs. 1,926 declining with 129 unchanged.

The Chemicals industry as a whole closed the day down 0.2% versus the S&P 500, which was down 0.8%. Top gainers within the Chemicals industry included Methes Energies International ( MEIL), up 6.8%, Metabolix ( MBLX), up 17.2%, Ceres ( CERE), up 17.7%, Orion Engineered Carbons ( OEC), up 3.5% and Senomyx ( SNMX), up 2.5%.

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

Orion Engineered Carbons ( OEC) is one of the companies that pushed the Chemicals industry higher today. Orion Engineered Carbons was up $0.59 (3.5%) to $17.45 on heavy volume. Throughout the day, 581,921 shares of Orion Engineered Carbons exchanged hands as compared to its average daily volume of 108,800 shares. The stock ranged in a price between $16.48-$17.49 after having opened the day at $16.87 as compared to the previous trading day's close of $16.86.

Orion Engineered Carbons has a market cap of $985.2 million and is part of the basic materials sector. Shares are down 0.8% year-to-date as of the close of trading on Thursday.

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At the close, Ceres ( CERE) was up $0.04 (17.7%) to $0.28 on heavy volume. Throughout the day, 2,524,951 shares of Ceres exchanged hands as compared to its average daily volume of 310,800 shares. The stock ranged in a price between $0.26-$0.32 after having opened the day at $0.28 as compared to the previous trading day's close of $0.24.

Ceres, Inc., an agricultural biotechnology company, develops and sells energy crops to produce renewable bioenergy feedstocks in North America. Ceres has a market cap of $12.1 million and is part of the basic materials sector. Shares are down 0.1% year-to-date as of the close of trading on Thursday. Currently there is 1 analyst who rates Ceres a buy, no analysts rate it a sell, and none rate it a hold.

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TheStreet Ratings rates Ceres 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.

Highlights from TheStreet Ratings analysis on CERE go as follows:

  • 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. Compared to other companies in the Oil, Gas & Consumable Fuels industry and the overall market, CERES INC's return on equity significantly trails that of both the industry average and the S&P 500.
  • CERE'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 83.90%, 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.
  • CERE, with its very weak revenue results, has greatly underperformed against the industry average of 6.7%. Since the same quarter one year prior, revenues plummeted by 62.1%. The declining revenue has not hurt the company's bottom line, with increasing earnings per share.
  • CERE's debt-to-equity ratio is very low at 0.00 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 6.01, which clearly demonstrates the ability to cover short-term cash needs.
  • CERES INC 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 two years. We feel that this trend should continue. This trend suggests that the performance of the business is improving. During the past fiscal year, CERES INC continued to lose money by earning -$0.92 versus -$1.31 in the prior year. This year, the market expects an improvement in earnings (-$0.54 versus -$0.92).

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

Metabolix ( MBLX) was another company that pushed the Chemicals industry higher today. Metabolix was up $0.07 (17.2%) to $0.47 on light volume. Throughout the day, 60,004 shares of Metabolix exchanged hands as compared to its average daily volume of 129,500 shares. The stock ranged in a price between $0.42-$0.48 after having opened the day at $0.44 as compared to the previous trading day's close of $0.40.

Metabolix has a market cap of $51.9 million and is part of the basic materials sector. Shares are down 2.6% 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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