3 Basic Materials Stocks Nudging The 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 are trading down today with the Dow Jones Industrial Average ( ^DJI) trading down 91.66 points (-0.5%) at 17,598 as of Monday, Aug. 3, 2015, 4:20 PM ET. The NYSE advances/declines ratio sits at 1,213 issues advancing vs. 1,856 declining with 132 unchanged.

The Basic Materials sector as a whole closed the day down 2.7% versus the S&P 500, which was down 0.3%. Top gainers within the Basic Materials sector included Alderon Iron Ore ( AXX), up 6.9%, Tengasco ( TGC), up 2.4%, Andatee China Marine Fuel Services ( AMCF), up 7.3%, Tasman Metals ( TAS), up 6.1% and Samson Oil & Gas ( SSN), up 10.6%.

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

Tasman Metals ( TAS) is one of the companies that pushed the Basic Materials sector higher today. Tasman Metals was up $0.02 (6.1%) to $0.35 on light volume. Throughout the day, 11,388 shares of Tasman Metals exchanged hands as compared to its average daily volume of 72,400 shares. The stock ranged in a price between $0.34-$0.35 after having opened the day at $0.34 as compared to the previous trading day's close of $0.33.

Tasman Metals has a market cap of $23.7 million and is part of the energy industry. Shares are down 21.4% year-to-date as of the close of trading on Friday.

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At the close, Andatee China Marine Fuel Services ( AMCF) was up $0.03 (7.3%) to $0.49 on light volume. Throughout the day, 15,761 shares of Andatee China Marine Fuel Services exchanged hands as compared to its average daily volume of 40,700 shares. The stock ranged in a price between $0.46-$0.52 after having opened the day at $0.46 as compared to the previous trading day's close of $0.46.

Andatee China Marine Fuel Services Corporation, through its subsidiaries, engages in the production, storage, distribution, and trading of blended marine fuel oil for cargo and fishing vessels in the People's Republic of China. Andatee China Marine Fuel Services has a market cap of $5.9 million and is part of the energy industry. Shares are down 70.1% year-to-date as of the close of trading on Friday. Currently there are no analysts who rate Andatee China Marine Fuel Services a buy, no analysts rate it a sell, and none rate it a hold.

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TheStreet Ratings rates Andatee China Marine Fuel Services as a sell. The company's weaknesses can be seen in multiple areas, such as its generally high debt management risk, disappointing return on equity, weak operating cash flow, generally disappointing historical performance in the stock itself and poor profit margins.

Highlights from TheStreet Ratings analysis on AMCF go as follows:

  • The debt-to-equity ratio is very high at 2.80 and currently higher than the industry average, implying increased risk associated with the management of debt levels within the company. Along with this, the company manages to maintain a quick ratio of 0.36, which clearly demonstrates the inability to cover short-term cash needs.
  • Current return on equity is lower than its ROE from the same quarter one year prior. This is a clear sign of weakness within the company. Compared to other companies in the Oil, Gas & Consumable Fuels industry and the overall market, ANDATEE CHINA MARINE FUEL's return on equity significantly trails that of both the industry average and the S&P 500.
  • Net operating cash flow has significantly decreased to $0.74 million or 74.14% when compared to the same quarter last year. In addition, when comparing the cash generation rate to the industry average, the firm's growth is significantly lower.
  • AMCF'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 67.24%, 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 gross profit margin for ANDATEE CHINA MARINE FUEL is currently extremely low, coming in at 5.63%. Regardless of AMCF's low profit margin, it has managed to increase from the same period last year. Despite the mixed results of the gross profit margin, the net profit margin of 0.08% trails the industry average.

You can view the full analysis from the report here: Andatee China Marine Fuel Services Ratings Report

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Alderon Iron Ore ( AXX) was another company that pushed the Basic Materials sector higher today. Alderon Iron Ore was up $0.01 (6.9%) to $0.15 on light volume. Throughout the day, 1,000 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 $0.15-$0.16 after having opened the day at $0.15 as compared to the previous trading day's close of $0.14.

Alderon Iron Ore has a market cap of $18.6 million and is part of the energy industry. Shares are down 58.4% year-to-date as of the close of trading on Friday.

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.