3 Stocks Pushing The Chemicals Industry Lower

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The Chemicals industry as a whole closed the day down 1.0% versus the S&P 500, which was down 0.9%. Laggards within the Chemicals industry included Methes Energies International ( MEIL), down 2.4%, Northern Technologies International ( NTIC), down 3.3%, Ceres ( CERE), down 2.9%, NL Industries ( NL), down 4.3% and Synthesis Energy Sys ( SYMX), down 2.2%.

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

NL Industries ( NL) is one of the companies that pushed the Chemicals industry lower today. NL Industries was down $0.33 (4.3%) to $7.31 on average volume. Throughout the day, 19,439 shares of NL Industries exchanged hands as compared to its average daily volume of 15,700 shares. The stock ranged in price between $7.26-$7.59 after having opened the day at $7.59 as compared to the previous trading day's close of $7.64.

NL Industries, Inc., through its subsidiary, CompX International Inc., operates in the component products industry in the United States and internationally. NL Industries has a market cap of $379.7 million and is part of the basic materials sector. Shares are down 11.2% year-to-date as of the close of trading on Wednesday. Currently there are no analysts who rate NL Industries a buy, 1 analyst rates it a sell, and none rate it a hold.

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TheStreet Ratings rates NL Industries as a sell. The company's weaknesses can be seen in multiple areas, such as its poor profit margins and generally disappointing historical performance in the stock itself.

Highlights from TheStreet Ratings analysis on NL go as follows:

  • The gross profit margin for NL INDUSTRIES is currently lower than what is desirable, coming in at 34.22%. It has decreased from the same quarter the previous year. Despite the weak results of the gross profit margin, the net profit margin of 52.46% has significantly outperformed against the industry average.
  • NL'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 31.83%, 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 return on equity has improved slightly when compared to the same quarter one year prior. This can be construed as a modest strength in the organization. Compared to other companies in the Commercial Services & Supplies industry and the overall market, NL INDUSTRIES's return on equity significantly trails that of both the industry average and the S&P 500.
  • NL INDUSTRIES reported significant earnings per share improvement in the most recent quarter compared to the same quarter a year ago. This company has reported somewhat volatile earnings recently. But, we feel it is poised for EPS growth in the coming year. During the past fiscal year, NL INDUSTRIES swung to a loss, reporting -$1.13 versus $1.16 in the prior year. This year, the market expects an improvement in earnings ($0.55 versus -$1.13).
  • The net income growth from the same quarter one year ago has significantly exceeded that of the S&P 500 and the Commercial Services & Supplies industry. The net income increased by 333.8% when compared to the same quarter one year prior, rising from -$5.94 million to $13.89 million.

You can view the full analysis from the report here: NL Industries Ratings Report

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At the close, Ceres ( CERE) was down $0.01 (2.9%) to $0.22 on average volume. Throughout the day, 551,281 shares of Ceres exchanged hands as compared to its average daily volume of 409,200 shares. The stock ranged in price between $0.22-$0.24 after having opened the day at $0.24 as compared to the previous trading day's close of $0.23.

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 $13.5 million and is part of the basic materials sector. Shares are down 4.1% year-to-date as of the close of trading on Wednesday. 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. Among the areas we feel are negative, one of the most important has been a generally disappointing historical performance in the stock itself.

Highlights from TheStreet Ratings analysis on CERE go as follows:

  • 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 80.42%, 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.
  • Current return on equity exceeded its ROE from the same quarter one year prior. This is a clear sign of strength 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.
  • The revenue fell significantly faster than the industry average of 6.5%. Since the same quarter one year prior, revenues fell by 47.6%. 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 5.14, 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. During the past fiscal year, CERES INC continued to lose money by earning -$0.92 versus -$1.31 in the prior year.

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.

Northern Technologies International ( NTIC) was another company that pushed the Chemicals industry lower today. Northern Technologies International was down $0.76 (3.3%) to $22.16 on light volume. Throughout the day, 1,397 shares of Northern Technologies International exchanged hands as compared to its average daily volume of 3,700 shares. The stock ranged in price between $22.15-$22.90 after having opened the day at $22.90 as compared to the previous trading day's close of $22.92.

Northern Technologies International Corporation develops, markets, and sells rust and corrosion inhibiting products and services to the automotive, electronics, electrical, mechanical, military, retail consumer, and oil and gas markets. Northern Technologies International has a market cap of $99.7 million and is part of the basic materials sector. Shares are up 3.3% year-to-date as of the close of trading on Wednesday.

TheStreet Ratings rates Northern Technologies International as a buy. 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, solid stock price performance, growth in earnings per share and increase in net income. We feel these strengths outweigh the fact that the company shows low profit margins.

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Highlights from TheStreet Ratings analysis on NTIC go as follows:

  • NTIC's revenue growth has slightly outpaced the industry average of 7.2%. Since the same quarter one year prior, revenues rose by 14.3%. This growth in revenue appears to have trickled down to the company's bottom line, improving the earnings per share.
  • NTIC 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 3.77, which clearly demonstrates the ability to cover short-term cash needs.
  • The stock has not only risen over the past year, it has done so at a faster pace than the S&P 500, reflecting the earnings growth and other positive factors similar to those we have cited here. Turning our attention to the future direction of the stock, it goes without saying that even the best stocks can fall in an overall down market. However, in any other environment, this stock still has good upside potential despite the fact that it has already risen in the past year.
  • NORTHERN TECH INTL has improved earnings per share by 15.8% 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. During the past fiscal year, NORTHERN TECH INTL increased its bottom line by earning $0.89 versus $0.76 in the prior year.
  • The net income growth from the same quarter one year ago has exceeded that of the S&P 500 and the Chemicals industry average. The net income increased by 17.3% when compared to the same quarter one year prior, going from $0.86 million to $1.01 million.

You can view the full analysis from the report here: Northern Technologies International 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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