3 Stocks Pushing The Consumer Durables Industry Lower

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The Consumer Durables industry as a whole closed the day up 0.2% versus the S&P 500, which was up 0.1%. Laggards within the Consumer Durables industry included Natuzzi SPA ( NTZ), down 3.9%, Elecsys ( ESYS), down 2.6%, SGOCO Group ( SGOC), down 3.1%, Flexsteel Industries ( FLXS), down 1.6% and Daktronics ( DAKT), down 2.5%.

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

Daktronics ( DAKT) is one of the companies that pushed the Consumer Durables industry lower today. Daktronics was down $0.32 (2.5%) to $12.52 on heavy volume. Throughout the day, 335,604 shares of Daktronics exchanged hands as compared to its average daily volume of 155,700 shares. The stock ranged in price between $12.41-$13.00 after having opened the day at $13.00 as compared to the previous trading day's close of $12.84.

Daktronics, Inc., together with its subsidiaries, designs, manufactures, and sells various electronic display systems and related products worldwide. Daktronics has a market cap of $508.8 million and is part of the consumer goods sector. Shares are down 18.1% year-to-date as of the close of trading on Thursday. Currently there is 1 analyst who rates Daktronics a buy, no analysts rate it a sell, and none rate it a hold.

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TheStreet Ratings rates Daktronics as a buy. The company's strengths can be seen in multiple areas, such as its growth in earnings per share, revenue growth, largely solid financial position with reasonable debt levels by most measures, good cash flow from operations and increase in net income. We feel these strengths outweigh the fact that the company has had somewhat disappointing return on equity.

Highlights from TheStreet Ratings analysis on DAKT go as follows:

  • DAKTRONICS INC has improved earnings per share by 16.7% in the most recent quarter compared to the same quarter a year ago. The company has demonstrated a pattern of positive earnings per share growth over the past two years. We feel that this trend should continue. During the past fiscal year, DAKTRONICS INC increased its bottom line by earning $0.53 versus $0.20 in the prior year. This year, the market expects an improvement in earnings ($0.62 versus $0.53).
  • Despite its growing revenue, the company underperformed as compared with the industry average of 6.1%. Since the same quarter one year prior, revenues slightly increased by 3.9%. This growth in revenue appears to have trickled down to the company's bottom line, improving the earnings per share.
  • DAKT 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 the favorable debt-to-equity ratio, the company maintains an adequate quick ratio of 1.31, which illustrates the ability to avoid short-term cash problems.
  • Net operating cash flow has significantly increased by 1194.91% to $8.62 million when compared to the same quarter last year. In addition, DAKTRONICS INC has also vastly surpassed the industry average cash flow growth rate of 74.82%.
  • Investors have apparently begun to recognize positive factors similar to those we have mentioned in this report, including earnings growth. This has helped drive up the company's shares by a sharp 26.30% over the past year, a rise that has exceeded that of the S&P 500 Index. We feel that the stock's sharp appreciation over the last year has driven it to a price level which is now somewhat expensive compared to the rest of its industry. The other strengths this company shows, however, justify the higher price levels.

You can view the full analysis from the report here: Daktronics Ratings Report

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At the close, Flexsteel Industries ( FLXS) was down $0.54 (1.6%) to $33.05 on light volume. Throughout the day, 17,345 shares of Flexsteel Industries exchanged hands as compared to its average daily volume of 28,700 shares. The stock ranged in price between $33.05-$34.46 after having opened the day at $33.78 as compared to the previous trading day's close of $33.59.

Flexsteel Industries, Inc. manufactures, imports, and markets residential and commercial upholstered and wood furniture products in the United States. Flexsteel Industries has a market cap of $245.7 million and is part of the consumer goods sector. Shares are up 9.3% year-to-date as of the close of trading on Thursday.

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TheStreet Ratings rates Flexsteel Industries as a buy. The company's strengths can be seen in multiple areas, such as its increase in net income, revenue growth, largely solid financial position with reasonable debt levels by most measures, reasonable valuation levels and good cash flow from operations. We feel these strengths outweigh the fact that the company has had somewhat disappointing return on equity.

Highlights from TheStreet Ratings analysis on FLXS go as follows:

  • The net income growth from the same quarter one year ago has exceeded that of the S&P 500 and greatly outperformed compared to the Household Durables industry average. The net income increased by 41.8% when compared to the same quarter one year prior, rising from $3.12 million to $4.42 million.
  • Despite its growing revenue, the company underperformed as compared with the industry average of 18.8%. Since the same quarter one year prior, revenues rose by 12.4%. Growth in the company's revenue appears to have helped boost the earnings per share.
  • FLXS 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. To add to this, FLXS has a quick ratio of 1.67, which demonstrates the ability of the company to cover short-term liquidity needs.
  • Powered by its strong earnings growth of 38.09% and other important driving factors, this stock has surged by 45.82% over the past year, outperforming the rise in the S&P 500 Index during the same period. Regarding the stock's future course, although almost any stock can fall in a broad market decline, FLXS should continue to move higher despite the fact that it has already enjoyed a very nice gain in the past year.

You can view the full analysis from the report here: Flexsteel Industries Ratings Report

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Natuzzi SPA ( NTZ) was another company that pushed the Consumer Durables industry lower today. Natuzzi SPA was down $0.11 (3.9%) to $2.74 on light volume. Throughout the day, 7,922 shares of Natuzzi SPA exchanged hands as compared to its average daily volume of 28,400 shares. The stock ranged in price between $2.74-$2.83 after having opened the day at $2.83 as compared to the previous trading day's close of $2.85.

Natuzzi S.p.A. designs, manufactures, and markets leather and fabric upholstered furniture worldwide. Natuzzi SPA has a market cap of $159.1 million and is part of the consumer goods sector. Shares are up 10.0% year-to-date as of the close of trading on Thursday.

TheStreet Ratings rates Natuzzi SPA 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, poor profit margins and weak operating cash flow.

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Highlights from TheStreet Ratings analysis on NTZ go as follows:

  • NATUZZI SPA 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, NATUZZI SPA reported poor results of -$1.71 versus -$0.63 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 Household Durables industry. The net income has significantly decreased by 155.0% when compared to the same quarter one year ago, falling from -$16.42 million to -$41.87 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 Household Durables industry and the overall market, NATUZZI SPA's return on equity significantly trails that of both the industry average and the S&P 500.
  • The gross profit margin for NATUZZI SPA is currently lower than what is desirable, coming in at 33.20%. It has decreased from the same quarter the previous year. Along with this, the net profit margin of -23.55% is significantly below that of the industry average.
  • Net operating cash flow has decreased to $5.77 million or 19.45% 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: Natuzzi SPA 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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