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3 Stocks Improving Performance Of The Consumer Goods Sector

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 are trading down today with the Dow Jones Industrial Average ( ^DJI) trading down 101.30 points (-0.6%) at 16,845 as of Wednesday, June 11, 2014, 3:55 PM ET. The NYSE advances/declines ratio sits at 997 issues advancing vs. 1,977 declining with 159 unchanged.

The Consumer Goods sector as a whole closed the day down 0.4% versus the S&P 500, which was down 0.3%. Top gainers within the Consumer Goods sector included Virco Manufacturing ( VIRC), up 5.5%, Crumbs Bake Shop ( CRMB), up 16.1%, Ocean Bio-Chem ( OBCI), up 4.6%, Forward Industries ( FORD), up 5.8% and American Lorain ( ALN), up 1.9%.

TheStreet Ratings Group would like to highlight 3 stocks pushing the sector higher today:

American Lorain ( ALN) is one of the companies that pushed the Consumer Goods sector higher today. American Lorain was up $0.02 (1.9%) to $1.09 on light volume. Throughout the day, 4,860 shares of American Lorain exchanged hands as compared to its average daily volume of 74,800 shares. The stock ranged in a price between $1.08-$1.09 after having opened the day at $1.09 as compared to the previous trading day's close of $1.07.

American Lorain Corporation, through its subsidiaries, develops, manufactures, and sells various food products in the People's Republic of China. It provides chestnut products, including aerated open-bottom chestnuts, sweetheart chestnuts, chestnuts in syrup, and golden chestnut kernels. American Lorain has a market cap of $37.4 million and is part of the automotive industry. Shares are up 35.4% year-to-date as of the close of trading on Tuesday. Currently there are no analysts who rate American Lorain a buy, no analysts rate it a sell, and none 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 American Lorain as a buy. The company's strengths can be seen in multiple areas, such as its largely solid financial position with reasonable debt levels by most measures, attractive valuation levels and increase in stock price during the past year. We feel these strengths outweigh the fact that the company has had somewhat weak growth in earnings per share.

Highlights from TheStreet Ratings analysis on ALN go as follows:

  • The current debt-to-equity ratio, 0.46, is low and is below the industry average, implying that there has been successful management of debt levels. To add to this, ALN has a quick ratio of 2.07, which demonstrates the ability of the company to cover short-term liquidity needs.
  • Compared to where it was 12 months ago, the stock is up, but it has so far lagged the appreciation in the S&P 500. 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.
  • ALN, with its decline in revenue, underperformed when compared the industry average of 3.7%. Since the same quarter one year prior, revenues fell by 10.1%. The declining revenue appears to have seeped down to the company's bottom line, decreasing earnings per share.
  • The gross profit margin for AMERICAN LORAIN CORP is rather low; currently it is at 21.00%. It has decreased from the same quarter the previous year. Along with this, the net profit margin of 7.88% trails that of the industry average.

You can view the full analysis from the report here: American Lorain 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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