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 0.2% versus the S&P 500, which was down 0.1%. Laggards within the Industrial Goods sector included Asia Pacific Wire & Cable ( APWC), down 1.8%, Ecology and Environment ( EEI), down 2.9%, WSI Industries ( WSCI), down 3.1%, Chicago Rivet & Machine ( CVR), down 4.6% and Sharps Compliance ( SMED), down 3.7%.

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 $0.57 (1.8%) to $31.50 on average volume. Throughout the day, 572,119 shares of Royal Philips exchanged hands as compared to its average daily volume of 508,800 shares. The stock ranged in price between $31.39-$31.68 after having opened the day at $31.39 as compared to the previous trading day's close of $32.07.

Koninklijke Philips N.V. is engaged in healthcare, consumer lifestyle, and lighting businesses worldwide. Royal Philips has a market cap of $29.1 billion and is part of the consumer durables industry. Shares are down 13.7% 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 3.56%.
  • 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.

At the close, Sharps Compliance ( SMED) was down $0.15 (3.7%) to $3.89 on heavy volume. Throughout the day, 63,685 shares of Sharps Compliance exchanged hands as compared to its average daily volume of 33,700 shares. The stock ranged in price between $3.85-$4.05 after having opened the day at $4.05 as compared to the previous trading day's close of $4.04.

Sharps Compliance Corp. provides management solutions for medical waste, used healthcare materials, and unused dispensed medications in the United States. Sharps Compliance has a market cap of $62.9 million and is part of the consumer durables industry. Shares are down 12.9% year-to-date as of the close of trading on Tuesday. Currently there are 3 analysts who rate Sharps Compliance 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 Sharps Compliance as a hold. The company's strengths can be seen in multiple areas, such as its solid stock price performance, revenue growth and largely solid financial position with reasonable debt levels by most measures. However, as a counter to these strengths, we find that the company's profit margins have been poor overall.

Highlights from TheStreet Ratings analysis on SMED go as follows:

  • SMED's revenue growth trails the industry average of 16.7%. 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.
  • SMED has no debt to speak of therefore resulting in a debt-to-equity ratio of zero, which we consider to be a relatively favorable sign. Along with this, the company maintains a quick ratio of 4.54, which clearly demonstrates the ability to cover short-term cash needs.
  • SHARPS COMPLIANCE CORP reported flat earnings per share in the most recent quarter. 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, SHARPS COMPLIANCE CORP continued to lose money by earning -$0.18 versus -$0.23 in the prior year. This year, the market expects an improvement in earnings (-$0.05 versus -$0.18).
  • 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 Health Care Providers & Services industry and the overall market, SHARPS COMPLIANCE CORP's return on equity significantly trails that of both the industry average and the S&P 500.
  • The gross profit margin for SHARPS COMPLIANCE CORP is currently lower than what is desirable, coming in at 28.26%. It has decreased from the same quarter the previous year. Along with this, the net profit margin of -16.84% is significantly below that of the industry average.

You can view the full analysis from the report here: Sharps Compliance 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.

Ecology and Environment ( EEI) was another company that pushed the Industrial Goods sector lower today. Ecology and Environment was down $0.32 (2.9%) to $10.82 on light volume. Throughout the day, 3,358 shares of Ecology and Environment exchanged hands as compared to its average daily volume of 5,200 shares. The stock ranged in price between $10.76-$11.15 after having opened the day at $11.15 as compared to the previous trading day's close of $11.14.

Ecology and Environment, Inc., an environmental consulting firm, provides professional services to the government and private sectors worldwide. Ecology and Environment has a market cap of $28.0 million and is part of the consumer durables industry. Shares are down 3.8% year-to-date as of the close of trading on Tuesday.

TheStreet Ratings rates Ecology and Environment as a hold. The company's strengths can be seen in multiple areas, such as its largely solid financial position with reasonable debt levels by most measures and expanding profit margins. However, as a counter to these strengths, we also find weaknesses including feeble growth in the company's earnings per share, deteriorating net income and disappointing return on equity.

STOCKS TO BUY: TheStreet Quant Ratings has identified a handful of stocks that can potentially TRIPLE in the next 12 months. Learn more.

Highlights from TheStreet Ratings analysis on EEI go as follows:

  • EEI's debt-to-equity ratio is very low at 0.07 and is currently below that of the industry average, implying that there has been very successful management of debt levels. To add to this, EEI has a quick ratio of 1.91, which demonstrates the ability of the company to cover short-term liquidity needs.
  • 44.47% is the gross profit margin for ECOLOGY AND ENVIRONMENT INC which we consider to be strong. Regardless of EEI's high profit margin, it has managed to decrease from the same period last year. Despite the mixed results of the gross profit margin, the net profit margin of -2.69% trails the industry average.
  • EEI, with its decline in revenue, underperformed when compared the industry average of 4.0%. Since the same quarter one year prior, revenues fell by 19.6%. Weakness in the company's revenue seems to have hurt the bottom line, decreasing earnings per share.
  • 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 Commercial Services & Supplies industry and the overall market, ECOLOGY AND ENVIRONMENT INC's return on equity significantly trails that of both the industry average and the S&P 500.
  • Net operating cash flow has decreased to $4.88 million or 48.13% when compared to the same quarter last year. In addition, when comparing to the industry average, the firm's growth rate is much lower.

You can view the full analysis from the report here: Ecology and Environment 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.

If you liked this article you might like

3 Stocks Under $5 That Are Worth Buying

3 Stocks Under $5 That Are Worth Buying

3 Stocks Under $5 That Are Worth Buying

3 Stocks Under $5 That Are Worth Buying

EY's Greene Sees More Med Tech, CRO Deals Ahead

EY's Greene Sees More Med Tech, CRO Deals Ahead

Philips: Diagnostics Are Positive

Philips: Diagnostics Are Positive

Philips Shares Gain After Solid Q2 Earnings; CEO Says 'No Contact' With Third Point Hedge Fund