3 Stocks Pushing The Materials & Construction Industry Lower

The Materials & Construction industry as a whole closed the day down 2.3% versus the S&P 500, which was down 1.3%. Laggards within the Materials & Construction industry included India Globalization Capital ( IGC), down 8.2%, China Ceramics ( CCCL), down 5.3%, China Recycling Energy ( CREG), down 1.9%, Avalon Holdings ( AWX), down 2.5% and Goldfield ( GV), down 5.0%.

TheStreet Ratings Group would like to highlight 3 stocks that pushed the industry lower today:

China Recycling Energy ( CREG) is one of the companies that pushed the Materials & Construction industry lower today. China Recycling Energy was down $0.02 (1.9%) to $0.78 on light volume. Throughout the day, 18,661 shares of China Recycling Energy exchanged hands as compared to its average daily volume of 51,500 shares. The stock ranged in price between $0.75-$0.82 after having opened the day at $0.80 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 $66.5 million and is part of the services sector. Shares are up 5.5% year-to-date as of the close of trading on Wednesday.

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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 5.3%. 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 46.81%, 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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At the close, China Ceramics ( CCCL) was down $0.05 (5.3%) to $0.89 on light volume. Throughout the day, 16,642 shares of China Ceramics exchanged hands as compared to its average daily volume of 36,600 shares. The stock ranged in price between $0.86-$0.94 after having opened the day at $0.94 as compared to the previous trading day's close of $0.94.

China Ceramics has a market cap of $20.2 million and is part of the services sector. Shares are up 16.1% year-to-date as of the close of trading on Wednesday.

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India Globalization Capital ( IGC) was another company that pushed the Materials & Construction industry lower today. India Globalization Capital was down $0.02 (8.2%) to $0.25 on light volume. Throughout the day, 25,467 shares of India Globalization Capital exchanged hands as compared to its average daily volume of 34,200 shares. The stock ranged in price between $0.22-$0.25 after having opened the day at $0.25 as compared to the previous trading day's close of $0.27.

India Globalization Capital, Inc., through its subsidiaries, engages in trading electronics; and the rental of heavy equipment in Hong Kong and India. India Globalization Capital has a market cap of $4.0 million and is part of the services sector. Shares are down 59.9% year-to-date as of the close of trading on Wednesday.

TheStreet Ratings rates India Globalization Capital as a sell. The company's weaknesses can be seen in multiple areas, such as its deteriorating net income, disappointing return on equity, poor profit margins and generally disappointing historical performance in the stock itself.

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Highlights from TheStreet Ratings analysis on IGC go as follows:

  • The company, on the basis of change in net income from the same quarter one year ago, has underperformed when compared to that of the S&P 500 and greatly underperformed compared to the Electronic Equipment, Instruments & Components industry average. The net income has significantly decreased by 31.0% when compared to the same quarter one year ago, falling from -$1.46 million to -$1.92 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 Electronic Equipment, Instruments & Components industry and the overall market, INDIA GLOBALIZATION CAPITAL's return on equity significantly trails that of both the industry average and the S&P 500.
  • The gross profit margin for INDIA GLOBALIZATION CAPITAL is currently extremely low, coming in at 5.41%. It has decreased significantly from the same period last year. Along with this, the net profit margin of -85.01% is significantly below that of the industry average.
  • IGC'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 67.08%, 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.
  • IGC's debt-to-equity ratio is very low at 0.22 and is currently below that of the industry average, implying that there has been very successful management of debt levels. Although the company had a strong debt-to-equity ratio, its quick ratio of 0.74 is somewhat weak and could be cause for future problems.

You can view the full analysis from the report here: India Globalization Capital Ratings Report

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