3 Stocks Pushing The Food & Beverage 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 Food & Beverage industry as a whole closed the day down 0.2% versus the S&P 500, which was down 0.3%. Laggards within the Food & Beverage industry included Seneca Foods ( SENEB), down 7.5%, Reeds ( REED), down 3.9%, National Beverage ( FIZZ), down 3.0%, Seneca Foods ( SENEA), down 4.5% and Inventure Foods ( SNAK), down 2.5%.

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

Seneca Foods ( SENEA) is one of the companies that pushed the Food & Beverage industry lower today. Seneca Foods was down $1.45 (4.5%) to $30.95 on light volume. Throughout the day, 6,717 shares of Seneca Foods exchanged hands as compared to its average daily volume of 21,600 shares. The stock ranged in price between $30.84-$32.14 after having opened the day at $32.14 as compared to the previous trading day's close of $32.40.

Seneca Foods Corporation produces and distributes packaged fruits and vegetables in the United States and internationally. Seneca Foods has a market cap of $284.2 million and is part of the consumer goods sector. Shares are up 1.6% year-to-date as of the close of trading on Tuesday.

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TheStreet Ratings rates Seneca Foods as a hold. The company's strengths can be seen in multiple areas, such as its revenue growth, 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 also find weaknesses including a generally disappointing performance in the stock itself, feeble growth in the company's earnings per share and deteriorating net income.

Highlights from TheStreet Ratings analysis on SENEA go as follows:

  • SENEA's revenue growth has slightly outpaced the industry average of 3.7%. Since the same quarter one year prior, revenues slightly increased by 6.8%. 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.
  • Net operating cash flow has increased to $45.49 million or 44.00% when compared to the same quarter last year. In addition, SENECA FOODS CORP has also vastly surpassed the industry average cash flow growth rate of -18.05%.
  • The current debt-to-equity ratio, 0.59, is low and is below the industry average, implying that there has been successful management of debt levels. Despite the fact that SENEA's debt-to-equity ratio is low, the quick ratio, which is currently 0.69, displays a potential problem in covering short-term cash needs.
  • SENECA FOODS CORP 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 suffered a declining pattern earnings per share over the past two years. During the past fiscal year, SENECA FOODS CORP reported lower earnings of $1.23 versus $3.56 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 Food Products industry. The net income has significantly decreased by 126.0% when compared to the same quarter one year ago, falling from $3.91 million to -$1.02 million.

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

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At the close, National Beverage ( FIZZ) was down $0.57 (3.0%) to $18.54 on average volume. Throughout the day, 28,408 shares of National Beverage exchanged hands as compared to its average daily volume of 29,700 shares. The stock ranged in price between $18.35-$18.92 after having opened the day at $18.77 as compared to the previous trading day's close of $19.11.

National Beverage Corp., through its subsidiaries, develops, manufactures, markets, and sells a portfolio of flavored beverage products primarily in the United States. National Beverage has a market cap of $895.6 million and is part of the consumer goods sector. Shares are down 5.2% year-to-date as of the close of trading on Tuesday.

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TheStreet Ratings rates National Beverage 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, notable return on equity and increase in stock price during the past year. We feel these strengths outweigh the fact that the company has had sub par growth in net income.

Highlights from TheStreet Ratings analysis on FIZZ go as follows:

  • The current debt-to-equity ratio, 0.34, is low and is below the industry average, implying that there has been successful management of debt levels. To add to this, FIZZ has a quick ratio of 1.62, which demonstrates the ability of the company to cover short-term liquidity needs.
  • NATIONAL BEVERAGE CORP's earnings per share declined by 16.7% 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, NATIONAL BEVERAGE CORP increased its bottom line by earning $1.01 versus $0.95 in the prior year.
  • FIZZ, with its decline in revenue, slightly underperformed the industry average of 2.5%. Since the same quarter one year prior, revenues slightly dropped by 5.5%. The declining revenue appears to have seeped down to the company's bottom line, decreasing earnings per share.
  • 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. The stock's price rise over the last year has driven it to a level which is somewhat expensive compared to the rest of its industry. We feel, however, that other strengths this company displays justify these higher price levels.
  • 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 Beverages industry and the overall market, NATIONAL BEVERAGE CORP's return on equity significantly exceeds that of both the industry average and the S&P 500.

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

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Reeds ( REED) was another company that pushed the Food & Beverage industry lower today. Reeds was down $0.18 (3.9%) to $4.41 on light volume. Throughout the day, 36,056 shares of Reeds exchanged hands as compared to its average daily volume of 76,000 shares. The stock ranged in price between $4.41-$4.63 after having opened the day at $4.62 as compared to the previous trading day's close of $4.59.

Reed's, Inc., together with its subsidiaries, develops, manufactures, markets, and sells natural non-alcoholic carbonated soft drinks, kombucha, candies, and ice creams primarily in the United States, Canada, Europe, and Asia. It offers 24 beverages, 4 candies, and 3 ice creams. Reeds has a market cap of $60.3 million and is part of the consumer goods sector. Shares are down 42.1% year-to-date as of the close of trading on Tuesday.

TheStreet Ratings rates Reeds as a sell. The company's weaknesses can be seen in multiple areas, such as its generally high debt management risk, 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 REED go as follows:

  • The debt-to-equity ratio is very high at 2.31 and currently higher than the industry average, implying increased risk associated with the management of debt levels within the company. Along with this, the company manages to maintain a quick ratio of 0.41, which clearly demonstrates the inability to cover short-term cash needs.
  • 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 Beverages industry and the overall market, REEDS INC's return on equity significantly trails that of both the industry average and the S&P 500.
  • The gross profit margin for REEDS INC is currently lower than what is desirable, coming in at 34.12%. Regardless of REED's low profit margin, it has managed to increase from the same period last year. Despite the mixed results of the gross profit margin, REED's net profit margin of -2.45% significantly underperformed when compared to the industry average.
  • In its most recent trading session, REED 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. 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.
  • REEDS INC 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, REEDS INC reported poor results of -$0.12 versus -$0.04 in the prior year. This year, the market expects an improvement in earnings ($0.00 versus -$0.12).

You can view the full analysis from the report here: Reeds 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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