3 Chemicals Stocks Moving The Industry Upward

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.

One out of the three major indices traded up today The three major indices are trading lower today with the Dow Jones Industrial Average ( ^DJI) trading down 6.62 points (0.0%) at 17,862 as of Wednesday, Feb. 11, 2015, 4:20 PM ET. The NYSE advances/declines ratio sits at 1,395 issues advancing vs. 1,696 declining with 137 unchanged.

The Chemicals industry as a whole closed the day up 0.3% versus the S&P 500, which was unchanged. Top gainers within the Chemicals industry included Ceres ( CERE), up 14.6%, Northern Technologies International ( NTIC), up 6.2%, Gevo ( GEVO), up 17.0%, Rentech Nitrogen Partners ( RNF), up 5.3% and Rentech ( RTK), up 4.2%.

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

Gevo ( GEVO) is one of the companies that pushed the Chemicals industry higher today. Gevo was up $0.02 (17.0%) to $0.16 on heavy volume. Throughout the day, 11,614,768 shares of Gevo exchanged hands as compared to its average daily volume of 1,488,600 shares. The stock ranged in a price between $0.13-$0.16 after having opened the day at $0.14 as compared to the previous trading day's close of $0.14.

Gevo, Inc., a renewable chemicals and biofuels company, focuses primarily on the production and sale of isobutanol and related products from renewable feedstocks. Gevo has a market cap of $13.3 million and is part of the basic materials sector. Shares are down 58.2% year-to-date as of the close of trading on Tuesday. Currently there are 2 analysts who rate Gevo a buy, no analysts rate it a sell, and none rate it a hold.

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TheStreet Ratings rates Gevo 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 GEVO go as follows:

  • GEVO'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 89.69%, 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 company's current return on equity greatly increased when compared to its ROE from the same quarter one year prior. This is a signal of significant strength within the corporation. Compared to other companies in the Oil, Gas & Consumable Fuels industry and the overall market, GEVO 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 -$7.39 million or 41.06% when compared to the same quarter last year. In addition, GEVO INC has also vastly surpassed the industry average cash flow growth rate of -16.81%.
  • The debt-to-equity ratio is somewhat low, currently at 0.68, and is less than that of the industry average, implying that there has been a relatively successful effort in the management of debt levels. To add to this, GEVO has a quick ratio of 1.52, which demonstrates the ability of the company to cover short-term liquidity needs.
  • GEVO 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, GEVO INC continued to lose money by earning -$1.49 versus -$2.01 in the prior year. This year, the market expects an improvement in earnings (-$0.68 versus -$1.49).

You can view the full analysis from the report here: Gevo 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, Northern Technologies International ( NTIC) was up $1.31 (6.2%) to $22.50 on average volume. Throughout the day, 5,769 shares of Northern Technologies International exchanged hands as compared to its average daily volume of 4,900 shares. The stock ranged in a price between $20.77-$22.50 after having opened the day at $21.11 as compared to the previous trading day's close of $21.19.

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 $96.6 million and is part of the basic materials sector. Shares are up 0.1% year-to-date as of the close of trading on Tuesday. Currently there are no analysts who rate Northern Technologies International 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 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, increase in stock price during the past year, growth in earnings per share and increase in net income. We feel these strengths outweigh the fact that the company shows weak operating cash flow.

Highlights from TheStreet Ratings analysis on NTIC go as follows:

  • The revenue growth came in higher than the industry average of 6.1%. 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 risen over the past year as investors have generally rewarded the company for its earnings growth and other positive factors like the ones we have cited in this report. 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 greatly outperformed compared to 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.

Ceres ( CERE) was another company that pushed the Chemicals industry higher today. Ceres was up $0.03 (14.6%) to $0.23 on heavy volume. Throughout the day, 1,384,939 shares of Ceres exchanged hands as compared to its average daily volume of 513,000 shares. The stock ranged in a price between $0.19-$0.24 after having opened the day at $0.19 as compared to the previous trading day's close of $0.20.

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 $9.4 million and is part of the basic materials sector. Shares are down 18.8% year-to-date as of the close of trading on Tuesday. Currently there is 1 analyst who rates Ceres a buy, no analysts rate it a sell, and none rate it a hold.

TheStreet Ratings rates Ceres as a sell. The company's weaknesses can be seen in multiple areas, such as its generally disappointing historical performance in the stock itself and weak operating cash flow.

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 83.95%, 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.
  • Net operating cash flow has decreased to -$6.29 million or 10.87% when compared to the same quarter last year. Despite a decrease in cash flow of 10.87%, CERES INC is in line with the industry average cash flow growth rate of -16.81%.
  • 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.
  • CERE, with its decline in revenue, underperformed when compared the industry average of 21.4%. 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.

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.

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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