3 Stocks Improving Performance Of The Automotive Industry
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.All three major indices traded up today with the Dow Jones Industrial Average (^DJI) trading up 100 points (0.6%) at 16,838 as of Thursday, June 5, 2014, 3:55 PM ET. The NYSE advances/declines ratio sits at 2,349 issues advancing vs. 623 declining with 153 unchanged.The Automotive industry as a whole closed the day up 1.8% versus the S&P 500, which was up 0.6%. Top gainers within the Automotive industry included Marine Products (MPX), up 1.6%, Sypris Solutions (SYPR), up 6.8%, Spartan Motors (SPAR), up 4.3%, Strattec Security (STRT), up 5.3% and UQM Technologies (UQM), up 5.1%.TheStreet Ratings Group would like to highlight 3 stocks pushing the industry higher today:Spartan Motors (SPAR) is one of the companies that pushed the Automotive industry higher today. Spartan Motors was up $0.21 (4.3%) to $5.05 on light volume. Throughout the day, 50,262 shares of Spartan Motors exchanged hands as compared to its average daily volume of 96,600 shares. The stock ranged in a price between $4.81-$5.10 after having opened the day at $4.84 as compared to the previous trading day's close of $4.84. Spartan Motors, Inc, through its subsidiaries, engineers, manufactures, and sells heavy-duty and custom vehicles in the United States, Canada, South America, and Asia. Spartan Motors has a market cap of $165.4 million and is part of the consumer goods sector. Shares are down 27.8% year-to-date as of the close of trading on Wednesday. Currently there are no analysts who rate Spartan Motors a buy, no analysts rate it a sell, and 3 rate it a hold.STOCKS TO BUY: TheStreet Quant Ratings has identified a handful of stocks that can potentially TRIPLE in the next 12 months. Learn more.TheStreet Ratings rates Spartan Motors 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 compelling growth in net income. However, as a counter to these strengths, we also find weaknesses including a generally disappointing performance in the stock itself and poor profit margins.Highlights from TheStreet Ratings analysis on SPAR go as follows:
- The revenue growth came in higher than the industry average of 3.4%. Since the same quarter one year prior, revenues rose by 33.1%. This growth in revenue appears to have trickled down to the company's bottom line, improving the earnings per share.
- SPAR's debt-to-equity ratio is very low at 0.03 and is currently below that of the industry average, implying that there has been very successful management of debt levels. Along with the favorable debt-to-equity ratio, the company maintains an adequate quick ratio of 1.20, which illustrates the ability to avoid short-term cash problems.
- SPARTAN MOTORS INC reported significant earnings per share improvement in the most recent quarter compared to 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, SPARTAN MOTORS INC reported poor results of -$0.18 versus -$0.07 in the prior year. This year, the market expects an improvement in earnings ($0.05 versus -$0.18).
- The gross profit margin for SPARTAN MOTORS INC is currently extremely low, coming in at 11.73%. Regardless of SPAR's low profit margin, it has managed to increase from the same period last year. Despite the mixed results of the gross profit margin, the net profit margin of -1.67% trails the industry average.
- SPAR has underperformed the S&P 500 Index, declining 15.06% from its price level of one year ago. The fact that the stock is now selling for less than others in its industry in relation to its current earnings is not reason enough to justify a buy rating at this time.
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