3 Stocks Pushing The Automotive Industry Lower

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The Automotive industry as a whole closed the day down 0.2% versus the S&P 500, which was down 0.3%. Laggards within the Automotive industry included Marine Products ( MPX), down 2.0%, SORL Auto Parts ( SORL), down 2.2%, Spartan Motors ( SPAR), down 2.5%, China Automotive Systems ( CAAS), down 1.7% and Strattec Security ( STRT), down 2.2%.

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

Spartan Motors ( SPAR) is one of the companies that pushed the Automotive industry lower today. Spartan Motors was down $0.13 (2.5%) to $5.18 on light volume. Throughout the day, 32,342 shares of Spartan Motors exchanged hands as compared to its average daily volume of 88,700 shares. The stock ranged in price between $5.13-$5.26 after having opened the day at $5.26 as compared to the previous trading day's close of $5.31.

Spartan Motors, Inc, through its subsidiaries, engineers, manufactures, and sells heavy-duty and custom vehicles in the United States, Canada, South America, and Asia. Spartan Motors has a market cap of $182.3 million and is part of the consumer goods sector. Shares are down 20.8% year-to-date as of the close of trading on Tuesday. Currently there are no analysts who rate Spartan Motors a buy, no analysts rate it a sell, and 3 rate it a hold.

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TheStreet Ratings rates Spartan Motors 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 compelling growth 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 SPAR go as follows:

  • The revenue growth came in higher than the industry average of 3.4%. Since the same quarter one year prior, revenues rose by 33.1%. This growth in revenue appears to have trickled down to the company's bottom line, improving the earnings per share.
  • SPAR's debt-to-equity ratio is very low at 0.03 and is currently below that of the industry average, implying that there has been very successful management of debt levels. Along with the favorable debt-to-equity ratio, the company maintains an adequate quick ratio of 1.20, which illustrates the ability to avoid short-term cash problems.
  • SPARTAN MOTORS 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, SPARTAN MOTORS INC reported poor results of -$0.18 versus -$0.07 in the prior year. This year, the market expects an improvement in earnings ($0.05 versus -$0.18).
  • The gross profit margin for SPARTAN MOTORS INC is currently extremely low, coming in at 11.73%. Regardless of SPAR'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 -1.67% trails the industry average.
  • SPAR has underperformed the S&P 500 Index, declining 14.72% from its price level of one year ago. 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: Spartan Motors Ratings Report

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At the close, SORL Auto Parts ( SORL) was down $0.07 (2.2%) to $3.15 on light volume. Throughout the day, 5,489 shares of SORL Auto Parts exchanged hands as compared to its average daily volume of 58,700 shares. The stock ranged in price between $3.15-$3.25 after having opened the day at $3.25 as compared to the previous trading day's close of $3.22.

SORL Auto Parts, Inc. develops, manufactures, and distributes automotive brake systems and other safety related auto parts. It operates in two segments, Commercial Vehicles Brake Systems, etc.; and Passenger Vehicles Brake Systems, etc. SORL Auto Parts has a market cap of $61.2 million and is part of the consumer goods sector. Shares are down 19.1% year-to-date as of the close of trading on Tuesday. Currently there is 1 analyst who rates SORL Auto Parts a buy, no analysts rate it a sell, and none rate it a hold.

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TheStreet Ratings rates SORL Auto Parts 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 attractive valuation levels. However, as a counter to these strengths, we also find weaknesses including deteriorating net income, disappointing return on equity and weak operating cash flow.

Highlights from TheStreet Ratings analysis on SORL go as follows:

  • SORL's revenue growth has slightly outpaced the industry average of 3.4%. Since the same quarter one year prior, revenues rose by 13.2%. This growth in revenue does not appear to have trickled down to the company's bottom line, displayed by a decline in earnings per share.
  • SORL's debt-to-equity ratio is very low at 0.09 and is currently below that of the industry average, implying that there has been very successful management of debt levels. To add to this, SORL has a quick ratio of 2.30, which demonstrates the ability of the company to cover short-term liquidity needs.
  • Compared to where it was a year ago today, the stock is now trading at a higher level, regardless of the company's weak earnings results. 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.
  • 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 Auto Components industry. The net income has significantly decreased by 80.9% when compared to the same quarter one year ago, falling from $4.11 million to $0.78 million.
  • 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. In comparison to the other companies in the Auto Components industry and the overall market, SORL AUTO PARTS INC's return on equity is significantly below that of the industry average and is below that of the S&P 500.

You can view the full analysis from the report here: SORL Auto Parts 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.

Marine Products ( MPX) was another company that pushed the Automotive industry lower today. Marine Products was down $0.16 (2.0%) to $7.85 on light volume. Throughout the day, 12,619 shares of Marine Products exchanged hands as compared to its average daily volume of 23,500 shares. The stock ranged in price between $7.68-$7.94 after having opened the day at $7.91 as compared to the previous trading day's close of $8.01.

Marine Products Corporation designs, manufactures, and sells recreational fiberglass powerboats in the sportboat, deckboat, cruiser, sport yacht, and sport fishing markets worldwide. Marine Products has a market cap of $304.9 million and is part of the consumer goods sector. Shares are down 20.3% year-to-date as of the close of trading on Tuesday. Currently there are no analysts who rate Marine Products a buy, no analysts rate it a sell, and 2 rate it a hold.

TheStreet Ratings rates Marine Products 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, compelling growth in net income, growth in earnings per share and good cash flow from operations. We feel these strengths outweigh the fact that the company has had lackluster performance in the stock itself.

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Highlights from TheStreet Ratings analysis on MPX go as follows:

  • MPX's revenue growth has slightly outpaced the industry average of 5.3%. Since the same quarter one year prior, revenues slightly increased by 7.7%. This growth in revenue appears to have trickled down to the company's bottom line, improving the earnings per share.
  • MPX 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 1.07, which illustrates the ability to avoid short-term cash problems.
  • 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 Leisure Equipment & Products industry average. The net income increased by 36.5% when compared to the same quarter one year prior, rising from $1.45 million to $1.98 million.
  • MARINE PRODUCTS CORP has improved earnings per share by 25.0% in the most recent quarter compared to the same quarter a year ago. Stable earnings per share over the past two years indicate the company has sound management over its earnings and share float. We anticipate the company beginning to experience more growth in the coming year. During the past fiscal year, MARINE PRODUCTS CORP's EPS of $0.19 remained unchanged from the prior years' EPS of $0.19. This year, the market expects an improvement in earnings ($0.25 versus $0.19).
  • Net operating cash flow has increased to $9.33 million or 38.89% when compared to the same quarter last year. Despite an increase in cash flow, MARINE PRODUCTS CORP's cash flow growth rate is still lower than the industry average growth rate of 61.25%.

You can view the full analysis from the report here: Marine Products 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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