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

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At the close, Cobra Electronics ( COBR) was down $0.10 (3.0%) to $3.21 on heavy volume. Throughout the day, 31,778 shares of Cobra Electronics exchanged hands as compared to its average daily volume of 13,300 shares. The stock ranged in price between $3.20-$3.33 after having opened the day at $3.30 as compared to the previous trading day's close of $3.31.

Cobra Electronics Corporation designs and markets consumer electronics products in the United States, Canada, and Europe. Cobra Electronics has a market cap of $22.0 million and is part of the consumer goods sector. Shares are up 9.6% year-to-date as of the close of trading on Tuesday.

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TheStreet Ratings rates Cobra Electronics as a sell. The company's weaknesses can be seen in multiple areas, such as its deteriorating net income, disappointing return on equity, poor profit margins and feeble growth in its earnings per share.

Highlights from TheStreet Ratings analysis on COBR go as follows:

  • The company, on the basis of change in net income from the same quarter one year ago, has significantly underperformed against the S&P 500 and did not exceed that of the Household Durables industry. The net income has decreased by 8.7% when compared to the same quarter one year ago, dropping from -$1.53 million to -$1.67 million.
  • Current return on equity is lower than its ROE from the same quarter one year prior. This is a clear sign of weakness within the company. Compared to other companies in the Household Durables industry and the overall market, COBRA ELECTRONICS CORP's return on equity significantly trails that of both the industry average and the S&P 500.
  • The gross profit margin for COBRA ELECTRONICS CORP is currently lower than what is desirable, coming in at 27.03%. It has decreased from the same quarter the previous year. Along with this, the net profit margin of -7.79% is significantly below that of the industry average.
  • COBRA ELECTRONICS CORP's earnings per share declined by 8.7% in the most recent quarter compared to the same quarter a year ago. The company has reported a trend of declining earnings per share over the past two years. However, the consensus estimate suggests that this trend should reverse in the coming year. During the past fiscal year, COBRA ELECTRONICS CORP swung to a loss, reporting -$0.17 versus $0.49 in the prior year. This year, the market expects an improvement in earnings (-$0.06 versus -$0.17).
  • COBR, with its decline in revenue, underperformed when compared the industry average of 18.7%. Since the same quarter one year prior, revenues slightly dropped by 0.9%. The declining revenue appears to have seeped down to the company's bottom line, decreasing earnings per share.

You can view the full analysis from the report here: Cobra Electronics 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.

Entertainment Gaming Asia ( EGT) was another company that pushed the Consumer Durables industry lower today. Entertainment Gaming Asia was down $0.04 (4.5%) to $0.82 on light volume. Throughout the day, 3,695 shares of Entertainment Gaming Asia exchanged hands as compared to its average daily volume of 25,500 shares. The stock ranged in price between $0.81-$0.87 after having opened the day at $0.84 as compared to the previous trading day's close of $0.86.

Entertainment Gaming Asia Inc. engages in the ownership and leasing of electronic gaming machines (EGMs) in resorts, hotels, and other venues primarily in Cambodia and the Philippines. Entertainment Gaming Asia has a market cap of $25.2 million and is part of the consumer goods sector. Shares are down 30.8% year-to-date as of the close of trading on Tuesday.

TheStreet Ratings rates Entertainment Gaming Asia as a sell. The company's weaknesses can be seen in multiple areas, such as its feeble growth in its earnings per share, deteriorating net income, disappointing return on equity, weak operating cash flow and generally disappointing historical performance in the stock itself.

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Highlights from TheStreet Ratings analysis on EGT go as follows:

  • ENTERTAINMENT GAMING ASIA has experienced a steep decline in earnings per share in the most recent quarter in comparison to its performance from the same quarter a year ago. The company has reported a trend of declining earnings per share over the past two years. During the past fiscal year, ENTERTAINMENT GAMING ASIA swung to a loss, reporting -$0.17 versus $0.07 in the prior year.
  • The company, on the basis of change in net income from the same quarter one year ago, has significantly underperformed when compared to that of the S&P 500 and the Hotels, Restaurants & Leisure industry. The net income has significantly decreased by 1683.5% when compared to the same quarter one year ago, falling from $0.27 million to -$4.23 million.
  • Return on equity has greatly decreased when compared to its ROE from the same quarter one year prior. This is a signal of major weakness within the corporation. Compared to other companies in the Hotels, Restaurants & Leisure industry and the overall market, ENTERTAINMENT GAMING ASIA's return on equity significantly trails that of both the industry average and the S&P 500.
  • Despite any intermediate fluctuations, we have only bad news to report on this stock's performance over the last year: it has tumbled by 56.07%, worse than the S&P 500's performance. Consistent with the plunge in the stock price, the company's earnings per share are down 1500.00% compared to the year-earlier quarter. Turning toward the future, the fact that the stock has come down in price over the past year should not necessarily be interpreted as a negative; it could be one of the factors that may help make the stock attractive down the road. Right now, however, we believe that it is too soon to buy.
  • Net operating cash flow has significantly decreased to $1.42 million or 67.15% when compared to the same quarter last year. Despite a decrease in cash flow ENTERTAINMENT GAMING ASIA is still fairing well by exceeding its industry average cash flow growth rate of -85.10%.

You can view the full analysis from the report here: Entertainment Gaming Asia 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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