3 Stocks Raising The Chemicals 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 traded up today with the Dow Jones Industrial Average ( ^DJI) trading up 212 points (1.2%) at 17,885 as of Thursday, Feb. 5, 2015, 4:20 PM ET. The NYSE advances/declines ratio sits at 2,364 issues advancing vs. 754 declining with 102 unchanged.

The Chemicals industry as a whole closed the day up 2.5% versus the S&P 500, which was up 1.0%. Top gainers within the Chemicals industry included Ikonics ( IKNX), up 7.4%, Methes Energies International ( MEIL), up 7.6%, NL Industries ( NL), up 2.9%, Synthesis Energy Sys ( SYMX), up 1.8% and Valhi ( VHI), up 3.0%.

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

Valhi ( VHI) is one of the companies that pushed the Chemicals industry higher today. Valhi was up $0.17 (3.0%) to $5.88 on light volume. Throughout the day, 12,126 shares of Valhi exchanged hands as compared to its average daily volume of 39,400 shares. The stock ranged in a price between $5.66-$5.88 after having opened the day at $5.67 as compared to the previous trading day's close of $5.71.

Valhi, Inc., through its subsidiaries, operates in the chemicals, component products, and waste management businesses. Valhi has a market cap of $2.0 billion and is part of the basic materials sector. Shares are down 10.9% year-to-date as of the close of trading on Wednesday. Currently there are no analysts who rate Valhi a buy, 1 analyst rates 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 Valhi as a hold. The company's strengths can be seen in multiple areas, such as its revenue growth, compelling growth in net income and reasonable valuation levels. However, as a counter to these strengths, we also find weaknesses including a generally disappointing performance in the stock itself, weak operating cash flow and generally higher debt management risk.

Highlights from TheStreet Ratings analysis on VHI go as follows:

  • VHI's revenue growth has slightly outpaced the industry average of 1.0%. Since the same quarter one year prior, revenues slightly increased by 6.3%. Growth in the company's revenue appears to have helped boost the earnings per share.
  • The net income growth from the same quarter one year ago has significantly exceeded that of the S&P 500 and the Chemicals industry. The net income increased by 183.9% when compared to the same quarter one year prior, rising from -$34.20 million to $28.70 million.
  • VALHI INC 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, VALHI INC swung to a loss, reporting -$0.29 versus $0.41 in the prior year. This year, the market expects an improvement in earnings ($0.17 versus -$0.29).
  • VHI'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 59.84%, 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. Despite the heavy decline in its share price, this stock is still more expensive (when compared to its current earnings) than most other companies in its industry.
  • Net operating cash flow has significantly decreased to $12.30 million or 81.07% when compared to the same quarter last year. In addition, when comparing to the industry average, the firm's growth rate is much lower.

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

At the close, Synthesis Energy Sys ( SYMX) was up $0.01 (1.8%) to $0.71 on light volume. Throughout the day, 109,898 shares of Synthesis Energy Sys exchanged hands as compared to its average daily volume of 191,400 shares. The stock ranged in a price between $0.69-$0.72 after having opened the day at $0.71 as compared to the previous trading day's close of $0.70.

Synthesis Energy Systems, Inc., a development stage energy and gasification technology company, provides various proprietary gasification technology systems and solutions to the energy and chemical industries worldwide. Synthesis Energy Sys has a market cap of $52.7 million and is part of the basic materials sector. Shares are down 26.1% year-to-date as of the close of trading on Wednesday. Currently there are no analysts who rate Synthesis Energy Sys 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 Synthesis Energy Sys 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 SYMX go as follows:

  • SYMX'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 34.22%, 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 change in net income from the same quarter one year ago has significantly exceeded that of the Energy Equipment & Services industry average, but is less than that of the S&P 500. The net income has decreased by 8.5% when compared to the same quarter one year ago, dropping from -$4.16 million to -$4.52 million.
  • 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 Energy Equipment & Services industry and the overall market, SYNTHESIS ENERGY SYSTEMS INC's return on equity significantly trails that of both the industry average and the S&P 500.
  • Net operating cash flow has increased to -$1.66 million or 40.38% when compared to the same quarter last year. The firm also exceeded the industry average cash flow growth rate of -0.92%.
  • SYMX 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. To add to this, SYMX has a quick ratio of 1.75, which demonstrates the ability of the company to cover short-term liquidity needs.

You can view the full analysis from the report here: Synthesis Energy Sys 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.

NL Industries ( NL) was another company that pushed the Chemicals industry higher today. NL Industries was up $0.21 (2.9%) to $7.56 on light volume. Throughout the day, 8,624 shares of NL Industries exchanged hands as compared to its average daily volume of 15,700 shares. The stock ranged in a price between $7.35-$7.82 after having opened the day at $7.35 as compared to the previous trading day's close of $7.35.

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 $365.6 million and is part of the basic materials sector. Shares are down 14.5% 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.

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 35.49%, 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

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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