3 Stocks Dragging In The Industrial Goods Sector

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

Two out of the three major indices are trading up today with the Dow Jones Industrial Average ( ^DJI) trading up 60 points (0.4%) at 15,029 as of Tuesday, May 7, 2013, 12:54 PM ET. The NYSE advances/declines ratio sits at 1,907 issues advancing vs. 994 declining with 159 unchanged.

The Industrial Goods sector currently sits up 0.2% versus the S&P 500, which is up 0.3%. On the negative front, top decliners within the sector include James Hardie Industries ( JHX), down 2.36, Royal Philips Electronics ( PHG), down 2.02, NVR ( NVR), down 1.75 and Emerson Electric ( EMR), down 1.61. Top gainers within the sector include Dresser-Rand Group ( DRC), up 4.9%, Timken Company ( TKR), up 2.9%, Stanley Black & Decker ( SWK), up 2.5%, Fastenal Company ( FAST), up 1.9% and Eaton Corporation ( ETN), up 1.7%.

TheStreet Ratings group would like to highlight 3 stocks pushing the sector lower today:

3. Colfax Corporation ( CFX) is one of the companies pushing the Industrial Goods sector lower today. As of noon trading, Colfax Corporation is down $1.09 (-2.4%) to $45.16 on heavy volume Thus far, 1.6 million shares of Colfax Corporation exchanged hands as compared to its average daily volume of 642,700 shares. The stock has ranged in price between $44.71-$45.69 after having opened the day at $45.48 as compared to the previous trading day's close of $46.25.

Colfax Corporation, a diversified industrial manufacturing and engineering company, provides gas- and fluid-handling and fabrication technology products and services to commercial and governmental customers worldwide. Colfax Corporation has a market cap of $4.3 billion and is part of the industrial industry. The company has a P/E ratio of 73.9, above the S&P 500 P/E ratio of 17.7. Shares are up 14.6% year to date as of the close of trading on Monday.

TheStreet Ratings rates Colfax Corporation as a hold. The company's strengths can be seen in multiple areas, such as its robust revenue growth, largely solid financial position with reasonable debt levels by most measures and good cash flow from operations. However, as a counter to these strengths, we also find weaknesses including disappointing return on equity and poor profit margins. Get the full Colfax Corporation Ratings Report now.

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2. As of noon trading, Generac Holdings ( GNRC) is down $1.31 (-3.4%) to $36.86 on heavy volume Thus far, 3.2 million shares of Generac Holdings exchanged hands as compared to its average daily volume of 836,600 shares. The stock has ranged in price between $36.76-$37.15 after having opened the day at $36.96 as compared to the previous trading day's close of $38.17.

Generac Holdings Inc. designs, manufactures, and markets a range of generators and other engine powered products for the residential, light commercial, industrial, and construction markets in the United States Canada, and Mexico. Generac Holdings has a market cap of $2.6 billion and is part of the industrial industry. The company has a P/E ratio of 23.5, above the S&P 500 P/E ratio of 17.7. Shares are up 11.3% year to date as of the close of trading on Monday.

TheStreet Ratings rates Generac Holdings as a buy. The company's strengths can be seen in multiple areas, such as its robust revenue growth, solid stock price performance, increase in net income, expanding profit margins and growth in earnings per share. We feel these strengths outweigh the fact that the company has had generally high debt management risk by most measures that we evaluated. Get the full Generac Holdings Ratings Report now.

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1. As of noon trading, TransDigm Group ( TDG) is down $2.40 (-1.6%) to $147.90 on average volume Thus far, 178,520 shares of TransDigm Group exchanged hands as compared to its average daily volume of 314,000 shares. The stock has ranged in price between $146.25-$151.00 after having opened the day at $151.00 as compared to the previous trading day's close of $150.30.

TransDigm Group Incorporated, through its subsidiaries, designs, produces, and supplies engineered aerospace components for commercial and military aircraft customers in the United States. TransDigm Group has a market cap of $7.5 billion and is part of the aerospace/defense industry. The company has a P/E ratio of 27.3, above the S&P 500 P/E ratio of 17.7. Shares are up 10.2% year to date as of the close of trading on Monday.

TheStreet Ratings rates TransDigm Group as a buy. The company's strengths can be seen in multiple areas, such as its robust revenue growth, good cash flow from operations, notable return on equity, expanding profit margins and increase in net income. We feel these strengths outweigh the fact that the company is trading at a premium valuation based on our review of its current price compared to such things as earnings and book value. Get the full TransDigm Group Ratings Report now.

Exclusive Offer: Jim Cramer's 'go-to' small/mid-cap guru Bryan Ashenberg only buys stocks he thinks could return 50-100%. See his top picks for 14-days FREE.

If you are interested in one of these 5 stocks, ETFs may be of interest. Investors who are bullish on the industrial goods sector could consider Industrial Select Sector SPDR ( XLI) while those bearish on the industrial goods sector could consider ProShares Short Dow 30 ( DOG).

A reminder about TheStreet Ratings group: 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.
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