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Valero Energy Corporation (VLO): Today's Featured Basic Materials Laggard

Tickers in this article: VLO

Editor's Note: TheStreet ratings do not represent the views of TheStreet's staff or its contributors. Ratings are established by computer based on metrics for performance (which includes growth, stock performance, efficiency and valuation) and risk (volatility and solvency). Companies with poor cash flow or high debt levels tend to earn lower ratings in our model

Valero Energy Corporation ( VLO) pushed the Basic Materials sector lower today making it today's featured Basic Materials laggard. The sector as a whole closed the day up 0.9%. By the end of trading, Valero Energy Corporation fell $0.73 (-1.7%) to $41.24 on average volume. Throughout the day, 9,503,886 shares of Valero Energy Corporation exchanged hands as compared to its average daily volume of 10,954,500 shares. The stock ranged in price between $41.02-$42.50 after having opened the day at $42.34 as compared to the previous trading day's close of $41.97. Other companies within the Basic Materials sector that declined today were: Whiting USA Trust I ( WHX), down 23.0%, Carbo Ceramics ( CRR), down 17.4%, Noranda Aluminum ( NOR), down 9.7% and Patterson-UTI Energy ( PTEN), down 7.2%.

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Valero Energy Corporation operates as an independent petroleum refining and marketing company. The company operates through three segments: Refining, Ethanol, and Retail. Valero Energy Corporation has a market cap of $22.5 billion and is part of the energy industry. The company has a P/E ratio of 10.8, below the S&P 500 P/E ratio of 17.7. Shares are up 23.0% year to date as of the close of trading on Wednesday.

TheStreet Ratings rates Valero Energy Corporation as a buy. The company's strengths can be seen in multiple areas, such as its solid stock price performance, growth in earnings per share, increase in net income, attractive valuation levels and good cash flow from operations. We feel these strengths outweigh the fact that the company has had somewhat disappointing return on equity.

On the positive front, Global Geophysical Services ( GGS), down 74.8%, GeoPetro Resources Company ( GPR), down 18.6%, Rubicon Minerals ( RBY), down 17.3% and Cliffs Natural Resources ( CLF), down 15.0% , were all gainers within the basic materials sector with Potash Corporation of Saskatchewan ( POT) being today's featured basic materials sector leader.

For investors not wanting singular stock exposure, ETFs may be of interest. Investors who are bullish on the basic materials sector could consider Materials Select Sector SPDR ( XLB) while those bearish on the basic materials sector could consider ProShares Short Basic Materials Fd ( SBM).