3 Stocks Pushing The Industrial 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 Industrial industry as a whole closed the day up 0.8% versus the S&P 500, which was unchanged. Laggards within the Industrial industry included Lime Energy ( LIME), down 2.6%, Compx International ( CIX), down 1.7%, Magnetek ( MAG), down 1.6%, Metalico ( MEA), down 1.7% and LSI Industries ( LYTS), down 1.9%.

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

Magnetek ( MAG) is one of the companies that pushed the Industrial industry lower today. Magnetek was down $0.36 (1.6%) to $21.88 on light volume. Throughout the day, 4,126 shares of Magnetek exchanged hands as compared to its average daily volume of 7,600 shares. The stock ranged in price between $21.82-$22.15 after having opened the day at $22.05 as compared to the previous trading day's close of $22.24.

Magnetek, Inc. provides digital power control systems to control motion and power primarily in material handling, elevator, and mining applications. Magnetek has a market cap of $72.2 million and is part of the industrial goods sector. Shares are down 7.2% year-to-date as of the close of trading on Friday.

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TheStreet Ratings rates Magnetek as a hold. The company's strengths can be seen in multiple areas, such as its notable return on equity, 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 company's profit margins have been poor overall.

Highlights from TheStreet Ratings analysis on MAG go as follows:

  • Compared to other companies in the Electrical Equipment industry and the overall market, MAGNETEK INC's return on equity significantly exceeds that of both the industry average and the S&P 500.
  • MAG 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, MAG has a quick ratio of 2.29, which demonstrates the ability of the company to cover short-term liquidity needs.
  • MAGNETEK INC reported significant earnings per share improvement 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, MAGNETEK INC reported lower earnings of $1.12 versus $2.14 in the prior year. This year, the market expects an improvement in earnings ($1.39 versus $1.12).
  • Regardless of the drop in revenue, the company managed to outperform against the industry average of 6.2%. Since the same quarter one year prior, revenues slightly dropped by 3.8%. The declining revenue has not hurt the company's bottom line, with increasing earnings per share.
  • The gross profit margin for MAGNETEK INC is currently lower than what is desirable, coming in at 34.65%. Regardless of MAG'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 4.37% trails the industry average.

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

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At the close, Compx International ( CIX) was down $0.18 (1.7%) to $10.22 on light volume. Throughout the day, 1,019 shares of Compx International exchanged hands as compared to its average daily volume of 9,000 shares. The stock ranged in price between $10.18-$10.53 after having opened the day at $10.18 as compared to the previous trading day's close of $10.40.

CompX International Inc. manufactures and sells security products and recreational marine components primarily in North America. The company operates through two segments, Security Products and Marine Components. Compx International has a market cap of $24.6 million and is part of the industrial goods sector. Shares are down 27.2% year-to-date as of the close of trading on Friday. Currently there is 1 analyst who rates Compx International a buy, no analysts rate it a sell, and none rate it a hold.

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TheStreet Ratings rates Compx International as a hold. The company's strengths can be seen in multiple areas, such as its revenue growth, largely solid financial position with reasonable debt levels by most measures and increase in net income. However, as a counter to these strengths, we also find weaknesses including a generally disappointing performance in the stock itself and poor profit margins.

Highlights from TheStreet Ratings analysis on CIX go as follows:

  • The revenue growth came in higher than the industry average of 3.8%. Since the same quarter one year prior, revenues rose by 20.2%. This growth in revenue appears to have trickled down to the company's bottom line, improving the earnings per share.
  • CIX 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 4.46, which clearly demonstrates the ability to cover short-term cash needs.
  • COMPX INTERNATIONAL INC 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 year. During the past fiscal year, COMPX INTERNATIONAL INC increased its bottom line by earning $0.49 versus $0.28 in the prior year.
  • The gross profit margin for COMPX INTERNATIONAL INC is currently lower than what is desirable, coming in at 33.47%. Regardless of CIX's low profit margin, it has managed to increase from the same period last year. Despite the mixed results of the gross profit margin, CIX's net profit margin of 8.30% compares favorably to the industry average.
  • CIX has underperformed the S&P 500 Index, declining 14.59% from its price level of one year ago. 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.

You can view the full analysis from the report here: Compx International 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.

Lime Energy ( LIME) was another company that pushed the Industrial industry lower today. Lime Energy was down $0.07 (2.6%) to $2.58 on light volume. Throughout the day, 3,180 shares of Lime Energy exchanged hands as compared to its average daily volume of 11,900 shares. The stock ranged in price between $2.58-$2.65 after having opened the day at $2.65 as compared to the previous trading day's close of $2.65.

Lime Energy Co. is engaged in designing and implementing energy efficiency programs for utilities in the United States. Lime Energy has a market cap of $9.7 million and is part of the industrial goods sector. Shares are down 8.3% year-to-date as of the close of trading on Friday.

TheStreet Ratings rates Lime Energy as a sell. The company's weaknesses can be seen in multiple areas, such as its weak operating cash flow, poor profit margins and generally disappointing historical performance in the stock itself.

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Highlights from TheStreet Ratings analysis on LIME go as follows:

  • Net operating cash flow has significantly decreased to -$6.94 million or 339.08% 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 gross profit margin for LIME ENERGY CO is currently lower than what is desirable, coming in at 31.90%. Regardless of LIME's low profit margin, it has managed to increase from the same period last year. Despite the mixed results of the gross profit margin, LIME's net profit margin of -9.51% significantly underperformed when compared to the industry average.
  • LIME's stock share price has done very poorly compared to where it was a year ago: Despite any rallies, the net result is that it is down by 48.48%, which is also worse that the performance of the S&P 500 Index. Investors have so far failed to pay much attention to the earnings improvements the company has managed to achieve over the last quarter. Naturally, the overall market trend is bound to be a significant factor. However, in one sense, the stock's sharp decline last year is a positive for future investors, making it cheaper (in proportion to its earnings over the past year) than most other stocks in its industry. But due to other concerns, we feel the stock is still not a good buy right now.
  • 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 Electrical Equipment industry and the overall market, LIME ENERGY CO's return on equity significantly trails that of both the industry average and the S&P 500.
  • LIME 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. Despite the fact that LIME's debt-to-equity ratio is low, the quick ratio, which is currently 0.63, displays a potential problem in covering short-term cash needs.

You can view the full analysis from the report here: Lime Energy 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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