3 Materials & Construction Stocks Pushing Industry Growth

All three major indices are trading down today with the Dow Jones Industrial Average ( ^DJI) trading down 46.37 points (-0.3%) at 17,373 as of Friday, Aug. 7, 2015, 4:20 PM ET. The NYSE advances/declines ratio sits at 1,266 issues advancing vs. 1,814 declining with 130 unchanged.

The Materials & Construction industry as a whole closed the day down 0.7% versus the S&P 500, which was down 0.3%. Top gainers within the Materials & Construction industry included Comstock ( CHCI), up 18.6%, China Recycling Energy ( CREG), up 2.2%, Avalon Holdings ( AWX), up 2.4%, Ecology and Environment ( EEI), up 2.0% and Integrated Electrical Services ( IESC), up 2.3%.

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

Ecology and Environment ( EEI) is one of the companies that pushed the Materials & Construction industry higher today. Ecology and Environment was up $0.23 (2.0%) to $11.62 on heavy volume. Throughout the day, 10,933 shares of Ecology and Environment exchanged hands as compared to its average daily volume of 5,800 shares. The stock ranged in a price between $11.34-$11.63 after having opened the day at $11.34 as compared to the previous trading day's close of $11.39.

Ecology and Environment, Inc., an environmental consulting firm, provides professional services to the government and private sectors worldwide. Ecology and Environment has a market cap of $30.2 million and is part of the industrial goods sector. Shares are up 24.7% year-to-date as of the close of trading on Thursday. Currently there are no analysts who rate Ecology and Environment a buy, no analysts rate it a sell, and none rate it a hold.

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TheStreet Ratings rates Ecology and Environment as a hold. The company's strengths can be seen in multiple areas, such as its solid stock price performance, compelling growth in net income and largely solid financial position with reasonable debt levels by most measures. However, as a counter to these strengths, we find that we feel that the company's cash flow from its operations has been weak overall.

Highlights from TheStreet Ratings analysis on EEI go as follows:

  • Compared to where it was a year ago today, the stock is now trading at a higher level, reflecting both the market's overall trend during that period and the fact that the company's earnings growth has been robust. Despite the fact that it has already risen in the past year, there is currently no conclusive evidence that warrants the purchase or sale of this stock.
  • 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 655.4% when compared to the same quarter one year prior, rising from -$0.32 million to $1.79 million.
  • 46.13% is the gross profit margin for ECOLOGY AND ENVIRONMENT INC which we consider to be strong. Regardless of EEI's high profit margin, it has managed to decrease from the same period last year. Despite the mixed results of the gross profit margin, the net profit margin of 5.91% trails the industry average.
  • 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. In comparison to the other companies in the Commercial Services & Supplies industry and the overall market, ECOLOGY AND ENVIRONMENT INC's return on equity is significantly below that of the industry average and is below that of the S&P 500.
  • Net operating cash flow has significantly decreased to $0.52 million or 59.95% 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: Ecology and Environment Ratings Report

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At the close, China Recycling Energy ( CREG) was up $0.02 (2.2%) to $0.82 on average volume. Throughout the day, 71,705 shares of China Recycling Energy exchanged hands as compared to its average daily volume of 60,400 shares. The stock ranged in a price between $0.79-$0.83 after having opened the day at $0.79 as compared to the previous trading day's close of $0.80.

China Recycling Energy Corporation engages in the recycling energy business in China. It designs, finances, constructs, operates, and transfers waste energy recycling projects to mid- to large-size enterprises involved in high energy-consuming businesses. China Recycling Energy has a market cap of $65.6 million and is part of the industrial goods sector. Shares are up 6.2% year-to-date as of the close of trading on Thursday. Currently there are no analysts who rate China Recycling Energy a buy, no analysts rate it a sell, and none rate it a hold.

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TheStreet Ratings rates China Recycling Energy as a hold. 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 and attractive valuation levels. However, as a counter to these strengths, we also find weaknesses including disappointing return on equity and a generally disappointing performance in the stock itself.

Highlights from TheStreet Ratings analysis on CREG go as follows:

  • CREG's revenue growth has slightly outpaced the industry average of 3.6%. Since the same quarter one year prior, revenues slightly increased by 2.8%. This growth in revenue does not appear to have trickled down to the company's bottom line, displaying stagnant earnings per share.
  • The debt-to-equity ratio is somewhat low, currently at 0.65, 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, CREG has a quick ratio of 1.73, which demonstrates the ability of the company to cover short-term liquidity needs.
  • CHINA RECYCLING ENERGY CORP reported flat earnings per share in the most recent quarter. 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, CHINA RECYCLING ENERGY CORP's EPS of $0.29 remained unchanged from the prior years' EPS of $0.29.
  • CREG'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 50.99%, which is also worse than the performance of the S&P 500 Index. 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 has slightly decreased from the same quarter one year prior. This implies a minor weakness in the organization. When compared to other companies in the Commercial Services & Supplies industry and the overall market, CHINA RECYCLING ENERGY CORP's return on equity is below that of both the industry average and the S&P 500.

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

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Comstock ( CHCI) was another company that pushed the Materials & Construction industry higher today. Comstock was up $0.08 (18.6%) to $0.51 on heavy volume. Throughout the day, 34,952 shares of Comstock exchanged hands as compared to its average daily volume of 21,100 shares. The stock ranged in a price between $0.42-$0.51 after having opened the day at $0.42 as compared to the previous trading day's close of $0.43.

Comstock Holding Companies, Inc. operates as a real estate development and construction services company in the United States. The company operates through three segments: Homebuilding, Multi-Family, and Real Estate Services. Comstock has a market cap of $8.9 million and is part of the industrial goods sector. Shares are down 58.2% year-to-date as of the close of trading on Thursday. Currently there are no analysts who rate Comstock a buy, no analysts rate it a sell, and none rate it a hold.

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

Highlights from TheStreet Ratings analysis on CHCI go as follows:

  • The gross profit margin for COMSTOCK HOLDING COS INC is rather low; currently it is at 15.14%. It has decreased from the same quarter the previous year. Along with this, the net profit margin of -9.14% is significantly below that of the industry average.
  • Net operating cash flow has decreased to -$3.78 million or 45.69% when compared to the same quarter last year. In addition, when comparing to the industry average, the firm's growth rate is much lower.
  • CHCI'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 62.40%, 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, on the basis of net income growth from the same quarter one year ago, has significantly underperformed compared to the Household Durables industry average, but is greater than that of the S&P 500. The net income increased by 40.3% when compared to the same quarter one year prior, rising from -$1.58 million to -$0.94 million.
  • COMSTOCK HOLDING COS INC reported significant earnings per share improvement in the most recent quarter compared to the same quarter a year ago. This company has not demonstrated a clear trend in earnings over the past 2 years, making it difficult to accurately predict earnings for the coming year. During the past fiscal year, COMSTOCK HOLDING COS INC reported poor results of -$0.32 versus -$0.10 in the prior year.

You can view the full analysis from the report here: Comstock Ratings Report

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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.