3 Stocks Raising The Basic Materials Sector 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 traded up today with the Dow Jones Industrial Average ( ^DJI) trading up 121 points (0.7%) at 17,751 as of Wednesday, July 29, 2015, 4:20 PM ET. The NYSE advances/declines ratio sits at 2,248 issues advancing vs. 830 declining with 135 unchanged.

The Basic Materials sector as a whole closed the day up 2.4% versus the S&P 500, which was up 0.7%. Top gainers within the Basic Materials sector included Alderon Iron Ore ( AXX), up 3.3%, Timberline Resources ( TLR), up 2.0%, Minco Gold ( MGH), up 9.5%, Houston American Energy ( HUSA), up 12.2% and Sutor Technology Group ( TOR), up 22.9%.

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

Houston American Energy ( HUSA) is one of the companies that pushed the Basic Materials sector higher today. Houston American Energy was up $0.02 (12.2%) to $0.23 on heavy volume. Throughout the day, 95,259 shares of Houston American Energy exchanged hands as compared to its average daily volume of 46,900 shares. The stock ranged in a price between $0.20-$0.23 after having opened the day at $0.20 as compared to the previous trading day's close of $0.20.

Houston American Energy Corp., an independent energy company, acquires, explores for, develops, and produces natural gas, crude oil, and condensate from properties located principally in the Gulf Coast area of the United States and South America. Houston American Energy has a market cap of $10.5 million and is part of the energy industry. Shares are up 27.7% year-to-date as of the close of trading on Tuesday. Currently there are no analysts who rate Houston American Energy a buy, no analysts rate it a sell, and none rate it a hold.

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TheStreet Ratings rates Houston American Energy as a sell. The company's weaknesses can be seen in multiple areas, such as its deteriorating net income, disappointing return on equity, feeble growth in its earnings per share and generally disappointing historical performance in the stock itself.

Highlights from TheStreet Ratings analysis on HUSA go as follows:

  • The company, on the basis of change in net income from the same quarter one year ago, has significantly underperformed when compared to that of the S&P 500 and the Oil, Gas & Consumable Fuels industry. The net income has significantly decreased by 121.9% when compared to the same quarter one year ago, falling from -$0.54 million to -$1.19 million.
  • Return on equity has greatly decreased when compared to its ROE from the same quarter one year prior. This is a signal of major weakness within the corporation. Compared to other companies in the Oil, Gas & Consumable Fuels industry and the overall market, HOUSTON AMERN ENERGY CORP's return on equity significantly trails that of both the industry average and the S&P 500.
  • HOUSTON AMERN ENERGY CORP has experienced a steep decline in earnings per share in the most recent quarter in comparison to its performance from the same quarter a year ago. Stable Earnings per share over the past year indicate the company has sound management over its earnings and share float. During the past fiscal year, HOUSTON AMERN ENERGY CORP reported poor results of -$0.07 versus -$0.06 in the prior year.
  • Despite any intermediate fluctuations, we have only bad news to report on this stock's performance over the last year: it has tumbled by 41.67%, worse than the S&P 500's performance. Consistent with the plunge in the stock price, the company's earnings per share are down 100.00% compared to 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.
  • Despite the weak revenue results, HUSA has significantly outperformed against the industry average of 38.8%. Since the same quarter one year prior, revenues slightly dropped by 3.8%. The declining revenue appears to have seeped down to the company's bottom line, decreasing earnings per share.

You can view the full analysis from the report here: Houston American Energy Ratings Report

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At the close, Timberline Resources ( TLR) was up $0.01 (2.0%) to $0.50 on average volume. Throughout the day, 12,445 shares of Timberline Resources exchanged hands as compared to its average daily volume of 13,900 shares. The stock ranged in a price between $0.48-$0.52 after having opened the day at $0.49 as compared to the previous trading day's close of $0.49.

Timberline Resources has a market cap of $5.9 million and is part of the energy industry. Shares are down 16.6% year-to-date as of the close of trading on Tuesday.

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Alderon Iron Ore ( AXX) was another company that pushed the Basic Materials sector higher today. Alderon Iron Ore was up $0.00 (3.3%) to $0.15 on light volume. Throughout the day, 4,200 shares of Alderon Iron Ore exchanged hands as compared to its average daily volume of 7,800 shares. The stock ranged in a price between $0.14-$0.15 after having opened the day at $0.14 as compared to the previous trading day's close of $0.14.

Alderon Iron Ore has a market cap of $18.5 million and is part of the energy industry. Shares are down 57.1% year-to-date as of the close of trading on Tuesday.

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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