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3 Stocks Pushing The Consumer Durables Industry Lower

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 or Stephanie Link.

The Consumer Durables industry as a whole closed the day up 3.9% versus the S&P 500, which was up 0.6%. Laggards within the Consumer Durables industry included Entertainment Gaming Asia ( EGT), down 4.5%, Cobra Electronics ( COBR), down 3.0%, Appliance Recycling Centers Of America ( ARCI), down 8.1%, Emerson Radio ( MSN), down 2.0% and Elecsys ( ESYS), down 6.4%.

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

Appliance Recycling Centers Of America ( ARCI) is one of the companies that pushed the Consumer Durables industry lower today. Appliance Recycling Centers Of America was down $0.30 (8.1%) to $3.40 on heavy volume. Throughout the day, 311,625 shares of Appliance Recycling Centers Of America exchanged hands as compared to its average daily volume of 18,900 shares. The stock ranged in price between $3.25-$3.63 after having opened the day at $3.50 as compared to the previous trading day's close of $3.70.

Appliance Recycling Centers of America, Inc., together with its subsidiaries, sells new household appliances through a chain of company-owned retail stores under the ApplianceSmart name. The company operates in two segments, Recycling and Retail. Appliance Recycling Centers Of America has a market cap of $16.1 million and is part of the consumer goods sector. Shares are up 0.4% year-to-date as of the close of trading on Tuesday.

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TheStreet Ratings rates Appliance Recycling Centers Of America as a hold. The company's strengths can be seen in multiple areas, such as its revenue growth, solid stock price performance and compelling growth in net income. However, as a counter to these strengths, we also find weaknesses including generally higher debt management risk, weak operating cash flow and poor profit margins.

Highlights from TheStreet Ratings analysis on ARCI go as follows:

  • The revenue growth came in higher than the industry average of 5.9%. Since the same quarter one year prior, revenues rose by 23.8%. Growth in the company's revenue appears to have helped boost the earnings per share.
  • Powered by its strong earnings growth of 156.75% and other important driving factors, this stock has surged by 83.57% over the past year, outperforming the rise in the S&P 500 Index during the same period. Regarding the stock's future course, our hold rating indicates that we do not recommend additional investment in this stock despite its gains in the past year.
  • 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 Specialty Retail industry and the overall market on the basis of return on equity, APPLIANCE RECYCLING CTR AMER has underperformed in comparison with the industry average, but has exceeded that of the S&P 500.
  • Net operating cash flow has significantly decreased to -$2.46 million or 192.85% when compared to the same quarter last year. In addition, when comparing to the industry average, the firm's growth rate is much lower.
  • The debt-to-equity ratio of 1.08 is relatively high when compared with the industry average, suggesting a need for better debt level management. To add to this, ARCI has a quick ratio of 0.67, this demonstrates the lack of ability of the company to cover short-term liquidity needs.

You can view the full analysis from the report here: Appliance Recycling Centers Of America Ratings Report

STOCKS TO BUY: TheStreet Quant Ratings has identified a handful of stocks that can potentially TRIPLE in the next 12 months. Learn more.

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