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3 Stocks Pushing The Industrial Goods Sector 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 Industrial Goods sector as a whole closed the day down 0.6% versus the S&P 500, which was down 0.3%. Laggards within the Industrial Goods sector included Taylor Devices ( TAYD), down 1.9%, TAT Technologies ( TATT), down 3.9%, Avalon Holdings ( AWX), down 7.1%, Industrial Services of America ( IDSA), down 2.4% and Compx International ( CIX), down 4.8%.

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

Royal Philips ( PHG) is one of the companies that pushed the Industrial Goods sector lower today. Royal Philips was down $0.52 (1.6%) to $32.23 on light volume. Throughout the day, 302,419 shares of Royal Philips exchanged hands as compared to its average daily volume of 516,100 shares. The stock ranged in price between $32.08-$32.34 after having opened the day at $32.27 as compared to the previous trading day's close of $32.75.

Koninklijke Philips N.V. is engaged in healthcare, consumer lifestyle, and lighting businesses worldwide. Royal Philips has a market cap of $29.7 billion and is part of the consumer durables industry. Shares are down 11.4% year-to-date as of the close of trading on Tuesday. Currently there is 1 analyst who rates Royal Philips a buy, no analysts rate it a sell, and 1 rates 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 Royal Philips as a hold. The company's strengths can be seen in multiple areas, such as its revenue growth, good cash flow from operations and largely solid financial position with reasonable debt levels by most measures. However, as a counter to these strengths, we find that the growth in the company's net income has been quite unimpressive.

Highlights from TheStreet Ratings analysis on PHG go as follows:

  • PHG's revenue growth has slightly outpaced the industry average of 0.6%. Since the same quarter one year prior, revenues slightly increased by 2.6%. This growth in revenue does not appear to have trickled down to the company's bottom line, displaying stagnant earnings per share.
  • Net operating cash flow has slightly increased to -$332.03 million or 6.80% when compared to the same quarter last year. In addition, KONINKLIJKE PHILIPS NV has also modestly surpassed the industry average cash flow growth rate of 3.57%.
  • The current debt-to-equity ratio, 0.34, is low and is below the industry average, implying that there has been successful management of debt levels. Although the company had a strong debt-to-equity ratio, its quick ratio of 0.78 is somewhat weak and could be cause for future problems.
  • 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. We feel that the combination of its price rise over the last year and its current price-to-earnings ratio relative to its industry tend to reduce its upside potential.
  • The change in net income from the same quarter one year ago has exceeded that of the Industrial Conglomerates industry average, but is less than that of the S&P 500. The net income has decreased by 7.8% when compared to the same quarter one year ago, dropping from $206.34 million to $190.12 million.

You can view the full analysis from the report here: Royal Philips 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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