3 Stocks Pushing The Chemicals Industry Lower

The Chemicals industry as a whole closed the day down 1.8% versus the S&P 500, which was down 1.7%. Laggards within the Chemicals industry included Methes Energies International ( MEIL), down 2.8%, Metabolix ( MBLX), down 12.2%, Delta Technology Holdings ( DELT), down 7.8%, NL Industries ( NL), down 4.4% and Oil-Dri Corp of America ( ODC), down 2.2%.

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

Agrium ( AGU) is one of the companies that pushed the Chemicals industry lower today. Agrium was down $4.77 (4.7%) to $97.48 on average volume. Throughout the day, 979,436 shares of Agrium exchanged hands as compared to its average daily volume of 686,300 shares. The stock ranged in price between $97.17-$101.36 after having opened the day at $101.30 as compared to the previous trading day's close of $102.25.

Agrium Inc. produces, markets, and distributes crop nutrients, crop protection products, seeds, and merchandise products primarily in the United States, Canada, South America, Europe, and Australia, and internationally. It operates in two segments, Retail and Wholesale. Agrium has a market cap of $15.2 billion and is part of the basic materials sector. Shares are up 8.0% year-to-date as of the close of trading on Thursday. Currently there are 6 analysts who rate Agrium a buy, 1 analyst rates it a sell, and 9 rate it a hold.

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TheStreet Ratings rates Agrium as a buy. The company's strengths can be seen in multiple areas, such as its solid stock price performance, increase in net income, attractive valuation levels, good cash flow from operations and largely solid financial position with reasonable debt levels by most measures. We feel its strengths outweigh the fact that the company shows low profit margins.

Highlights from TheStreet Ratings analysis on AGU go as follows:

  • The stock has not only risen over the past year, it has done so at a faster pace than the S&P 500, reflecting the earnings growth and other positive factors similar to those we have cited here. Turning our attention to the future direction of the stock, it goes without saying that even the best stocks can fall in an overall down market. However, in any other environment, this stock still has good upside potential despite the fact that it has already risen in the past year.
  • The company, on the basis of net income growth from the same quarter one year ago, has significantly outperformed against the S&P 500 and exceeded that of the Chemicals industry average. The net income increased by 9.6% when compared to the same quarter one year prior, going from $615.00 million to $674.00 million.
  • Net operating cash flow has significantly increased by 810.00% to $91.00 million when compared to the same quarter last year. In addition, AGRIUM INC has also vastly surpassed the industry average cash flow growth rate of -4.11%.
  • The debt-to-equity ratio is somewhat low, currently at 0.77, 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 0.88 is somewhat weak and could be cause for future problems.

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

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At the close, NL Industries ( NL) was down $0.18 (4.4%) to $3.87 on heavy volume. Throughout the day, 50,644 shares of NL Industries exchanged hands as compared to its average daily volume of 26,900 shares. The stock ranged in price between $3.55-$4.08 after having opened the day at $3.55 as compared to the previous trading day's close of $4.05.

NL Industries, Inc., through its subsidiary, CompX International Inc., operates in the component products industry in the United States and internationally. NL Industries has a market cap of $221.1 million and is part of the basic materials sector. Shares are down 52.9% year-to-date as of the close of trading on Thursday. Currently there are no analysts who rate NL Industries a buy, 1 analyst rates it a sell, and none rate it a hold.

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TheStreet Ratings rates NL Industries as a hold. Among the primary strengths of the company is its revenue growth. At the same time, however, we also find weaknesses including a generally disappointing performance in the stock itself, unimpressive growth in net income and poor profit margins.

Highlights from TheStreet Ratings analysis on NL go as follows:

  • The revenue growth came in higher than the industry average of 5.3%. Since the same quarter one year prior, revenues slightly increased by 7.6%. This growth in revenue does not appear to have trickled down to the company's bottom line, displayed by a decline in earnings per share.
  • NL INDUSTRIES 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. This company has reported somewhat volatile earnings recently. But, we feel it is poised for EPS growth in the coming year. During the past fiscal year, NL INDUSTRIES turned its bottom line around by earning $0.59 versus -$1.13 in the prior year. This year, the market expects an improvement in earnings ($0.73 versus $0.59).
  • 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 Commercial Services & Supplies industry. The net income has significantly decreased by 633.6% when compared to the same quarter one year ago, falling from $5.47 million to -$29.20 million.
  • The gross profit margin for NL INDUSTRIES is currently lower than what is desirable, coming in at 31.49%. It has decreased from the same quarter the previous year. Along with this, the net profit margin of -101.03% is significantly below that of the industry average.
  • Despite any intermediate fluctuations, we have only bad news to report on this stock's performance over the last year: it has tumbled by 46.42%, worse than the S&P 500's performance. Consistent with the plunge in the stock price, the company's earnings per share are down 645.45% compared to the year-earlier quarter. Despite the heavy decline in its share price, this stock is still more expensive (when compared to its current earnings) than most other companies in its industry.

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

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Metabolix ( MBLX) was another company that pushed the Chemicals industry lower today. Metabolix was down $0.29 (12.2%) to $2.09 on light volume. Throughout the day, 12,899 shares of Metabolix exchanged hands as compared to its average daily volume of 19,300 shares. The stock ranged in price between $1.95-$2.35 after having opened the day at $2.35 as compared to the previous trading day's close of $2.38.

Metabolix, Inc., an advanced biomaterials company, focuses on delivering sustainable solutions to the plastics industry. The company develops and commercializes technologies for the production of polymers and chemicals in microbes and plants. Metabolix has a market cap of $66.4 million and is part of the basic materials sector. Shares are down 3.6% year-to-date as of the close of trading on Thursday. Currently there are no analysts who rate Metabolix a buy, no analysts rate it a sell, and 1 rates it a hold.

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

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Highlights from TheStreet Ratings analysis on MBLX go as follows:

  • Net operating cash flow has decreased to -$5.47 million or 12.02% when compared to the same quarter last year. In conjunction, when comparing current results to the industry average, METABOLIX INC has marginally lower results.
  • MBLX'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 29.05%, 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'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. Compared to other companies in the Chemicals industry and the overall market, METABOLIX INC's return on equity significantly trails that of both the industry average and the S&P 500.
  • MBLX has no debt to speak of therefore resulting in a debt-to-equity ratio of zero, which we consider to be a relatively favorable sign. Along with this, the company maintains a quick ratio of 6.10, which clearly demonstrates the ability to cover short-term cash needs.
  • METABOLIX 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 year. We feel that this trend should continue. This trend suggests that the performance of the business is improving. During the past fiscal year, METABOLIX INC continued to lose money by earning -$3.48 versus -$5.34 in the prior year. This year, the market expects an improvement in earnings (-$0.96 versus -$3.48).

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

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