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 was unchanged today versus the S&P 500, which was up 0.2%. Laggards within the Industrial Goods sector included Taylor Devices ( TAYD), down 2.1%, LGL Group ( LGL), down 2.2%, Intelligent Systems ( INS), down 2.1%, Asia Pacific Wire & Cable ( APWC), down 1.9% and Integrated Electrical Services ( IESC), down 2.3%.

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

Aegion ( AEGN) is one of the companies that pushed the Industrial Goods sector lower today. Aegion was down $1.31 (5.6%) to $22.17 on heavy volume. Throughout the day, 414,855 shares of Aegion exchanged hands as compared to its average daily volume of 208,900 shares. The stock ranged in price between $21.94-$23.02 after having opened the day at $22.74 as compared to the previous trading day's close of $23.48.

Aegion Corporation is engaged in the research and development, manufacture, installation, coating and insulation, cathodic protection, distribution, and licensing of proprietary technologies and services for the protection and maintenance of infrastructure worldwide. Aegion has a market cap of $913.7 million and is part of the materials & construction industry. Shares are up 7.3% year-to-date as of the close of trading on Tuesday. Currently there are 4 analysts who rate Aegion a buy, no analysts rate it a sell, and 2 rate it a hold.

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TheStreet Ratings rates Aegion as a buy. 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, increase in net income, increase in stock price during the past year and growth in earnings per share. We feel these strengths outweigh the fact that the company has had somewhat disappointing return on equity.

Highlights from TheStreet Ratings analysis on AEGN go as follows:

  • The revenue growth greatly exceeded the industry average of 12.1%. Since the same quarter one year prior, revenues rose by 35.5%. This growth in revenue appears to have trickled down to the company's bottom line, improving the earnings per share.
  • The current debt-to-equity ratio, 0.54, is low and is below the industry average, implying that there has been successful management of debt levels. To add to this, AEGN has a quick ratio of 2.40, which demonstrates the ability of the company to cover short-term liquidity needs.
  • The net income growth from the same quarter one year ago has significantly exceeded that of the S&P 500 and the Construction & Engineering industry. The net income increased by 62.1% when compared to the same quarter one year prior, rising from $2.71 million to $4.40 million.
  • 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. Turning our attention to the future direction of the stock, it goes without saying that even the best stocks can fall in an overall down market. However, in any other environment, this stock still has good upside potential despite the fact that it has already risen in the past year.
  • AEGION CORP has improved earnings per share by 33.3% in the most recent quarter compared to the same quarter a year ago. 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, AEGION CORP reported lower earnings of $1.30 versus $1.37 in the prior year. This year, the market expects an improvement in earnings ($1.62 versus $1.30).

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

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At the close, Integrated Electrical Services ( IESC) was down $0.15 (2.3%) to $6.26 on light volume. Throughout the day, 4,272 shares of Integrated Electrical Services exchanged hands as compared to its average daily volume of 11,400 shares. The stock ranged in price between $6.25-$6.60 after having opened the day at $6.46 as compared to the previous trading day's close of $6.41.

Integrated Electrical Services, Inc., through its subsidiaries, provides communications, residential, commercial and industrial, and infrastructure solutions in the United States. Integrated Electrical Services has a market cap of $122.7 million and is part of the materials & construction industry. Shares are up 18.9% year-to-date as of the close of trading on Tuesday.

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TheStreet Ratings rates Integrated Electrical Services as a hold. The company's strengths can be seen in multiple areas, such as its solid stock price performance, impressive record of earnings per share growth and compelling growth in net income. 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 IESC go as follows:

  • Compared to where it was a year ago today, the stock is now trading at a higher level, reflecting both the market's overall trend during that period and the fact that the company's earnings growth has been robust. Despite the fact that it has already risen in the past year, there is currently no conclusive evidence that warrants the purchase or sale of this stock.
  • INTEGRATED ELECTRICAL SVCS reported significant earnings per share improvement 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. During the past fiscal year, INTEGRATED ELECTRICAL SVCS continued to lose money by earning -$0.14 versus -$0.18 in the prior year.
  • Despite the weak revenue results, IESC has outperformed against the industry average of 12.1%. Since the same quarter one year prior, revenues slightly dropped by 1.4%. The declining revenue has not hurt the company's bottom line, with increasing earnings per share.
  • The return on equity has improved slightly when compared to the same quarter one year prior. This can be construed as a modest strength in the organization. Compared to other companies in the Construction & Engineering industry and the overall market, INTEGRATED ELECTRICAL SVCS's return on equity significantly trails that of both the industry average and the S&P 500.
  • The gross profit margin for INTEGRATED ELECTRICAL SVCS is rather low; currently it is at 17.21%. Regardless of IESC's low profit margin, it has managed to increase from the same period last year. Despite the mixed results of the gross profit margin, the net profit margin of 0.33% trails the industry average.

You can view the full analysis from the report here: Integrated Electrical Services Ratings Report

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LGL Group ( LGL) was another company that pushed the Industrial Goods sector lower today. LGL Group was down $0.09 (2.2%) to $4.12 on light volume. Throughout the day, 360 shares of LGL Group exchanged hands as compared to its average daily volume of 5,300 shares. The stock ranged in price between $4.12-$4.12 after having opened the day at $4.12 as compared to the previous trading day's close of $4.21.

The LGL Group, Inc., through its subsidiaries, designs, manufactures, and markets standard and custom-engineered electronic components in the United States and internationally. LGL Group has a market cap of $10.9 million and is part of the materials & construction industry. Shares are down 22.2% year-to-date as of the close of trading on Tuesday.

TheStreet Ratings rates LGL Group 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 generally disappointing historical performance in the stock itself.

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Highlights from TheStreet Ratings analysis on LGL go as follows:

  • LGL GROUP INC 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, LGL GROUP INC reported poor results of -$3.16 versus -$0.51 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 Electronic Equipment, Instruments & Components industry. The net income has significantly decreased by 874.7% when compared to the same quarter one year ago, falling from -$0.08 million to -$0.81 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 Electronic Equipment, Instruments & Components industry and the overall market, LGL GROUP INC's return on equity significantly trails that of both the industry average and the S&P 500.
  • The gross profit margin for LGL GROUP INC is currently lower than what is desirable, coming in at 29.86%. It has decreased from the same quarter the previous year. Along with this, the net profit margin of -13.19% is significantly below that of the industry average.
  • The share price of LGL GROUP INC has not done very well: it is down 20.70% and has underperformed the S&P 500, in part reflecting the company's sharply declining earnings per share when compared to the year-earlier quarter. The fact that the stock is now selling for less than others in its industry in relation to its current earnings is not reason enough to justify a buy rating at this time.

You can view the full analysis from the report here: LGL Group 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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