3 Industrial Goods Stocks Pushing The Sector Higher

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 Industrial Goods sector as a whole closed the day down 0.6% versus the S&P 500, which was down 0.3%. Top gainers within the Industrial Goods sector included LGL Group ( LGL), up 3.2%, Euro Tech Holdings ( CLWT), up 5.0%, Breeze-Eastern ( BZC), up 6.1%, WSI Industries ( WSCI), up 2.0% and Gencor Industries ( GENC), up 3.4%.

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

Gencor Industries ( GENC) is one of the companies that pushed the Industrial Goods sector higher today. Gencor Industries was up $0.35 (3.4%) to $10.73 on average volume. Throughout the day, 16,675 shares of Gencor Industries exchanged hands as compared to its average daily volume of 14,100 shares. The stock ranged in a price between $10.21-$10.73 after having opened the day at $10.38 as compared to the previous trading day's close of $10.38.

Gencor Industries, Inc., together with its subsidiaries, designs, manufactures, and sells heavy machinery used in the production of highway construction materials, synthetic fuels, and environmental control equipment. Gencor Industries has a market cap of $82.6 million and is part of the materials & construction industry. Shares are up 8.8% year-to-date as of the close of trading on Tuesday. Currently there are no analysts who rate Gencor Industries a buy, no analysts rate it a sell, and none rate it a hold.

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TheStreet Ratings rates Gencor Industries as a buy. The company's strengths can be seen in multiple areas, such as its solid stock price performance, largely solid financial position with reasonable debt levels by most measures and notable return on equity. We feel these strengths outweigh the fact that the company has had sub par growth in net income.

Highlights from TheStreet Ratings analysis on GENC go as follows:

  • GENC 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 17.44, which clearly demonstrates the ability to cover short-term cash needs.
  • Compared to its closing price of one year ago, GENC's share price has jumped by 42.50%, exceeding the performance of the broader market during that same time frame. Turning to the future, naturally, any stock can fall in a major bear market. However, in almost any other environment, the stock should continue to move higher despite the fact that it has already enjoyed nice gains in the past year.
  • GENC, with its decline in revenue, underperformed when compared the industry average of 6.6%. Since the same quarter one year prior, revenues fell by 18.0%. Weakness in the company's revenue seems to have hurt the bottom line, decreasing 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. In comparison to the other companies in the Machinery industry and the overall market, GENCOR INDUSTRIES INC's return on equity is significantly below that of the industry average and is below that of the S&P 500.
  • GENCOR INDUSTRIES INC's earnings per share declined by 35.5% in the most recent quarter compared to the same quarter a year ago. This company has reported somewhat volatile earnings recently. We feel it is likely to report a decline in earnings in the coming year. During the past fiscal year, GENCOR INDUSTRIES INC increased its bottom line by earning $0.71 versus $0.47 in the prior year. For the next year, the market is expecting a contraction of 32.4% in earnings ($0.48 versus $0.71).

You can view the full analysis from the report here: Gencor Industries 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, Breeze-Eastern ( BZC) was up $0.76 (6.1%) to $13.15 on heavy volume. Throughout the day, 46,850 shares of Breeze-Eastern exchanged hands as compared to its average daily volume of 5,200 shares. The stock ranged in a price between $12.13-$13.79 after having opened the day at $12.30 as compared to the previous trading day's close of $12.39.

Breeze-Eastern Corporation designs, develops, manufactures, sells, and services engineered mission equipment for specialty aerospace and defense applications. Breeze-Eastern has a market cap of $126.8 million and is part of the materials & construction industry. Shares are up 34.5% year-to-date as of the close of trading on Tuesday. Currently there are no analysts who rate Breeze-Eastern 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 Breeze-Eastern as a buy. 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, solid stock price performance, compelling growth in net income and expanding profit margins. Although no company is perfect, currently we do not see any significant weaknesses which are likely to detract from the generally positive outlook.

Highlights from TheStreet Ratings analysis on BZC go as follows:

  • The revenue growth greatly exceeded the industry average of 3.3%. Since the same quarter one year prior, revenues rose by 33.4%. Growth in the company's revenue appears to have helped boost the earnings per share.
  • BZC 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.
  • Powered by its strong earnings growth of 141.66% and other important driving factors, this stock has surged by 40.61% over the past year, outperforming the rise in the S&P 500 Index during the same period. Turning to the future, naturally, any stock can fall in a major bear market. However, in almost any other environment, the stock should continue to move higher despite the fact that it has already enjoyed nice gains in the past year.
  • The net income growth from the same quarter one year ago has significantly exceeded that of the S&P 500 and the Aerospace & Defense industry. The net income increased by 143.5% when compared to the same quarter one year prior, rising from $1.16 million to $2.82 million.
  • 41.14% is the gross profit margin for BREEZE-EASTERN CORP which we consider to be strong. Regardless of BZC's high profit margin, it has managed to decrease from the same period last year. Despite the mixed results of the gross profit margin, BZC's net profit margin of 9.61% compares favorably to the industry average.

You can view the full analysis from the report here: Breeze-Eastern 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.

LGL Group ( LGL) was another company that pushed the Industrial Goods sector higher today. LGL Group was up $0.15 (3.2%) to $4.85 on heavy volume. Throughout the day, 21,157 shares of LGL Group exchanged hands as compared to its average daily volume of 5,400 shares. The stock ranged in a price between $4.55-$4.93 after having opened the day at $4.93 as compared to the previous trading day's close of $4.70.

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 $11.4 million and is part of the materials & construction industry. Shares are down 13.1% year-to-date as of the close of trading on Tuesday. Currently there are no analysts who rate LGL Group a buy, no analysts rate it a sell, and none rate it a hold.

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.

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 24.06% 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.

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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