3 Stocks Raising The Materials & Construction 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.

All three major indices are trading down today with the Dow Jones Industrial Average ( ^DJI) trading down 84.48 points (-0.5%) at 18,204 as of Tuesday, March 3, 2015, 3:25 PM ET. The NYSE advances/declines ratio sits at 1,114 issues advancing vs. 1,916 declining with 150 unchanged.

The Materials & Construction industry as a whole closed the day down 0.8% versus the S&P 500, which was down 0.5%. Top gainers within the Materials & Construction industry included China Recycling Energy ( CREG), up 8.2%, A V Homes ( AVHI), up 1.6%, Casella Waste Systems ( CWST), up 2.9%, Gafisa ( GFA), up 2.2% and Nortek ( NTK), up 7.6%.

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

Casella Waste Systems ( CWST) is one of the companies that pushed the Materials & Construction industry higher today. Casella Waste Systems was up $0.13 (2.9%) to $4.64 on average volume. Throughout the day, 174,392 shares of Casella Waste Systems exchanged hands as compared to its average daily volume of 129,200 shares. The stock ranged in a price between $4.49-$4.67 after having opened the day at $4.51 as compared to the previous trading day's close of $4.51.

Casella Waste Systems has a market cap of $174.0 million and is part of the basic materials sector. Shares are up 11.6% 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, A V Homes ( AVHI) was up $0.25 (1.6%) to $15.61 on average volume. Throughout the day, 28,760 shares of A V Homes exchanged hands as compared to its average daily volume of 37,700 shares. The stock ranged in a price between $15.10-$15.65 after having opened the day at $15.21 as compared to the previous trading day's close of $15.36.

AV Homes, Inc. is engaged in the homebuilding, community development, and land sale business in Florida, Arizona, and the Carolinas. A V Homes has a market cap of $334.5 million and is part of the basic materials sector. Shares are up 3.9% year-to-date as of the close of trading on Monday. Currently there is 1 analyst who rates A V Homes a buy, no analysts rate it a sell, and 1 rates 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 A V Homes as a hold. The company's strengths can be seen in multiple areas, such as its robust revenue growth, impressive record of earnings per share growth and compelling growth in net income. However, as a counter to these strengths, we also find weaknesses including poor profit margins, weak operating cash flow and a generally disappointing performance in the stock itself.

Highlights from TheStreet Ratings analysis on AVHI go as follows:

  • AVHI's very impressive revenue growth greatly exceeded the industry average of 9.0%. Since the same quarter one year prior, revenues leaped by 147.8%. Growth in the company's revenue appears to have helped boost the earnings per share.
  • A V HOMES 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, A V HOMES INC continued to lose money by earning -$1.52 versus -$7.20 in the prior year. This year, the market expects an improvement in earnings ($0.08 versus -$1.52).
  • Even though the current debt-to-equity ratio is 1.05, it is still below the industry average, suggesting that this level of debt is acceptable within the Real Estate Management & Development industry.
  • Net operating cash flow has significantly decreased to -$29.41 million or 53.50% when compared to the same quarter last year. Despite a decrease in cash flow A V HOMES INC is still fairing well by exceeding its industry average cash flow growth rate of -70.33%.
  • The gross profit margin for A V HOMES INC is currently extremely low, coming in at 9.64%. Regardless of AVHI's low profit margin, it has managed to increase from the same period last year. Despite the mixed results of the gross profit margin, AVHI's net profit margin of 0.78% is significantly lower than the industry average.

You can view the full analysis from the report here: A V Homes 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.

China Recycling Energy ( CREG) was another company that pushed the Materials & Construction industry higher today. China Recycling Energy was up $0.09 (8.2%) to $1.19 on heavy volume. Throughout the day, 516,688 shares of China Recycling Energy exchanged hands as compared to its average daily volume of 119,700 shares. The stock ranged in a price between $1.11-$1.21 after having opened the day at $1.11 as compared to the previous trading day's close of $1.10.

China Recycling Energy Corporation is engaged in the recycling energy business primarily in the People's Republic of China. China Recycling Energy has a market cap of $75.6 million and is part of the basic materials sector. Shares are up 46.0% year-to-date as of the close of trading on Monday. Currently there are no analysts who rate China Recycling Energy a buy, no analysts rate it a sell, and none rate it a hold.

TheStreet Ratings rates China Recycling Energy as a hold. The company's strengths can be seen in multiple areas, such as its attractive valuation levels, expanding profit margins and good cash flow from operations. However, as a counter to these strengths, we find that the stock has had a generally disappointing performance in the past year.

Highlights from TheStreet Ratings analysis on CREG go as follows:

  • The gross profit margin for CHINA RECYCLING ENERGY CORP is currently very high, coming in at 88.35%. It has increased significantly from the same period last year. Along with this, the net profit margin of 65.18% significantly outperformed against the industry average.
  • The debt-to-equity ratio is somewhat low, currently at 0.70, and is less than that of the industry average, implying that there has been a relatively successful effort in the management of debt levels. Although the company had a strong debt-to-equity ratio, its quick ratio of 0.91 is somewhat weak and could be cause for future problems.
  • 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. In comparison to the other companies in the Commercial Services & Supplies industry and the overall market, CHINA RECYCLING ENERGY CORP's return on equity is significantly below that of the industry average and is below that of the S&P 500.
  • Looking at the price performance of CREG's shares over the past 12 months, there is not much good news to report: the stock is down 68.31%, and it has underformed the S&P 500 Index. In addition, the company's earnings per share are lower today than the year-earlier 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.

You can view the full analysis from the report here: China Recycling Energy 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.

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