3 Stocks Improving Performance Of The Consumer Goods Sector

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.

All three major indices are trading down today with the Dow Jones Industrial Average ( ^DJI) trading down 101.30 points (-0.6%) at 16,845 as of Wednesday, June 11, 2014, 3:55 PM ET. The NYSE advances/declines ratio sits at 997 issues advancing vs. 1,977 declining with 159 unchanged.

The Consumer Goods sector as a whole closed the day down 0.4% versus the S&P 500, which was down 0.3%. Top gainers within the Consumer Goods sector included Virco Manufacturing ( VIRC), up 5.5%, Crumbs Bake Shop ( CRMB), up 16.1%, Ocean Bio-Chem ( OBCI), up 4.6%, Forward Industries ( FORD), up 5.8% and American Lorain ( ALN), up 1.9%.

TheStreet Ratings Group would like to highlight 3 stocks pushing the sector higher today:

American Lorain ( ALN) is one of the companies that pushed the Consumer Goods sector higher today. American Lorain was up $0.02 (1.9%) to $1.09 on light volume. Throughout the day, 4,860 shares of American Lorain exchanged hands as compared to its average daily volume of 74,800 shares. The stock ranged in a price between $1.08-$1.09 after having opened the day at $1.09 as compared to the previous trading day's close of $1.07.

American Lorain Corporation, through its subsidiaries, develops, manufactures, and sells various food products in the People's Republic of China. It provides chestnut products, including aerated open-bottom chestnuts, sweetheart chestnuts, chestnuts in syrup, and golden chestnut kernels. American Lorain has a market cap of $37.4 million and is part of the automotive industry. Shares are up 35.4% year-to-date as of the close of trading on Tuesday. Currently there are no analysts who rate American Lorain 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 American Lorain as a buy. The company's strengths can be seen in multiple areas, such as its largely solid financial position with reasonable debt levels by most measures, attractive valuation levels and increase in stock price during the past year. We feel these strengths outweigh the fact that the company has had somewhat weak growth in earnings per share.

Highlights from TheStreet Ratings analysis on ALN go as follows:

  • The current debt-to-equity ratio, 0.46, is low and is below the industry average, implying that there has been successful management of debt levels. To add to this, ALN has a quick ratio of 2.07, which demonstrates the ability of the company to cover short-term liquidity needs.
  • 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.
  • ALN, with its decline in revenue, underperformed when compared the industry average of 3.7%. Since the same quarter one year prior, revenues fell by 10.1%. The declining revenue appears to have seeped down to the company's bottom line, decreasing earnings per share.
  • The gross profit margin for AMERICAN LORAIN CORP is rather low; currently it is at 21.00%. It has decreased from the same quarter the previous year. Along with this, the net profit margin of 7.88% trails that of the industry average.

You can view the full analysis from the report here: American Lorain 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, Crumbs Bake Shop ( CRMB) was up $0.04 (16.1%) to $0.32 on heavy volume. Throughout the day, 207,563 shares of Crumbs Bake Shop exchanged hands as compared to its average daily volume of 131,600 shares. The stock ranged in a price between $0.28-$0.32 after having opened the day at $0.29 as compared to the previous trading day's close of $0.28.

Crumbs Bake Shop, Inc. sells various cupcakes, cakes, cookies, and other baked goods under the trade name of Crumbs Bake Shop. It also sells hot and cold beverages. The company offers its products through company-operated stores, as well as through its Website crumbs.com. Crumbs Bake Shop has a market cap of $3.3 million and is part of the automotive industry. Shares are down 65.8% year-to-date as of the close of trading on Tuesday. Currently there are no analysts who rate Crumbs Bake Shop 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 Crumbs Bake Shop as a sell. Among the areas we feel are negative, one of the most important has been a generally disappointing historical performance in the stock itself.

Highlights from TheStreet Ratings analysis on CRMB go as follows:

  • CRMB'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 77.78%, 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.
  • CRUMBS BAKE SHOP INC has improved earnings per share by 14.3% in the most recent quarter compared to the same quarter a year ago. This company has not demonstrated a clear trend in earnings over the past 2 years, making it difficult to accurately predict earnings for the coming year. During the past fiscal year, CRUMBS BAKE SHOP INC reported poor results of -$1.31 versus -$0.91 in the prior year.
  • The gross profit margin for CRUMBS BAKE SHOP INC is rather high; currently it is at 52.88%. Regardless of CRMB's high profit margin, it has managed to decrease from the same period last year. Despite the mixed results of the gross profit margin, CRMB's net profit margin of -42.65% significantly underperformed when compared to the industry average.
  • The net income growth from the same quarter one year ago has exceeded that of the Food & Staples Retailing industry average, but is less than that of the S&P 500. The net income increased by 9.7% when compared to the same quarter one year prior, going from -$5.36 million to -$4.84 million.
  • Net operating cash flow has increased to -$0.54 million or 48.36% when compared to the same quarter last year. The firm also exceeded the industry average cash flow growth rate of 11.79%.

You can view the full analysis from the report here: Crumbs Bake Shop 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.

Virco Manufacturing ( VIRC) was another company that pushed the Consumer Goods sector higher today. Virco Manufacturing was up $0.11 (5.5%) to $2.13 on average volume. Throughout the day, 2,942 shares of Virco Manufacturing exchanged hands as compared to its average daily volume of 3,000 shares. The stock ranged in a price between $2.06-$2.13 after having opened the day at $2.06 as compared to the previous trading day's close of $2.02.

Virco Mfg. Corporation is engaged in the design, production, and distribution of furniture for the commercial and education markets in the United States. Virco Manufacturing has a market cap of $30.6 million and is part of the automotive industry. Shares are down 11.9% year-to-date as of the close of trading on Tuesday. Currently there are no analysts who rate Virco Manufacturing a buy, no analysts rate it a sell, and 1 rates it a hold.

TheStreet Ratings rates Virco Manufacturing as a sell. Among the areas we feel are negative, one of the most important has been an overall disappointing return on equity.

Highlights from TheStreet Ratings analysis on VIRC go as follows:

  • The company's current return on equity has slightly decreased from the same quarter one year prior. This implies a minor weakness in the organization. Compared to other companies in the Commercial Services & Supplies industry and the overall market, VIRCO MFG. CORP's return on equity significantly trails that of both the industry average and the S&P 500.
  • In its most recent trading session, VIRC has closed at a price level that was not very different from its closing price of one year earlier. This is probably due to its weak earnings growth as well as other mixed factors. Turning our attention to the future direction of the stock, we do not believe this stock offers ample reward opportunity to compensate for the risks, despite the fact that it rose over the past year.
  • The company, on the basis of net income growth from the same quarter one year ago, has underperformed when compared to that of the S&P 500 and the Commercial Services & Supplies industry average. The net income increased by 17.2% when compared to the same quarter one year prior, going from $2.91 million to $3.41 million.
  • VIRC's debt-to-equity ratio is very low at 0.11 and is currently below that of the industry average, implying that there has been very successful management of debt levels. Although the company had a strong debt-to-equity ratio, its quick ratio of 0.72 is somewhat weak and could be cause for future problems.
  • 37.39% is the gross profit margin for VIRCO MFG. CORP which we consider to be strong. It has increased from the same quarter the previous year. Regardless of the strong results of the gross profit margin, the net profit margin of 5.73% trails the industry average.

You can view the full analysis from the report here: Virco Manufacturing 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.

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.

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