3 Stocks Pushing The Industrial Goods Sector 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 Goods sector as a whole closed the day down 0.6% versus the S&P 500, which was down 0.3%. Laggards within the Industrial Goods sector included Taylor Devices ( TAYD), down 1.9%, TAT Technologies ( TATT), down 3.9%, Avalon Holdings ( AWX), down 7.1%, Industrial Services of America ( IDSA), down 2.4% and Compx International ( CIX), down 4.8%.

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

Royal Philips ( PHG) is one of the companies that pushed the Industrial Goods sector lower today. Royal Philips was down $0.52 (1.6%) to $32.23 on light volume. Throughout the day, 302,419 shares of Royal Philips exchanged hands as compared to its average daily volume of 516,100 shares. The stock ranged in price between $32.08-$32.34 after having opened the day at $32.27 as compared to the previous trading day's close of $32.75.

Koninklijke Philips N.V. is engaged in healthcare, consumer lifestyle, and lighting businesses worldwide. Royal Philips has a market cap of $29.7 billion and is part of the consumer durables industry. Shares are down 11.4% year-to-date as of the close of trading on Tuesday. Currently there is 1 analyst who rates Royal Philips a buy, no analysts rate it a sell, and 1 rates it a hold.

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TheStreet Ratings rates Royal Philips 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 find that the growth in the company's net income has been quite unimpressive.

Highlights from TheStreet Ratings analysis on PHG go as follows:

  • PHG's revenue growth has slightly outpaced the industry average of 0.6%. Since the same quarter one year prior, revenues slightly increased by 2.6%. This growth in revenue does not appear to have trickled down to the company's bottom line, displaying stagnant earnings per share.
  • Net operating cash flow has slightly increased to -$332.03 million or 6.80% when compared to the same quarter last year. In addition, KONINKLIJKE PHILIPS NV has also modestly surpassed the industry average cash flow growth rate of 3.57%.
  • 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. Although the company had a strong debt-to-equity ratio, its quick ratio of 0.78 is somewhat weak and could be cause for future problems.
  • 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. We feel that the combination of its price rise over the last year and its current price-to-earnings ratio relative to its industry tend to reduce its upside potential.
  • The change in net income from the same quarter one year ago has exceeded that of the Industrial Conglomerates industry average, but is less than that of the S&P 500. The net income has decreased by 7.8% when compared to the same quarter one year ago, dropping from $206.34 million to $190.12 million.

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

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At the close, Compx International ( CIX) was down $0.52 (4.8%) to $10.32 on heavy volume. Throughout the day, 22,266 shares of Compx International exchanged hands as compared to its average daily volume of 8,600 shares. The stock ranged in price between $10.00-$10.78 after having opened the day at $10.34 as compared to the previous trading day's close of $10.84.

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 $24.8 million and is part of the consumer durables industry. Shares are down 26.5% year-to-date as of the close of trading on Tuesday. 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.

Industrial Services of America ( IDSA) was another company that pushed the Industrial Goods sector lower today. Industrial Services of America was down $0.12 (2.4%) to $4.78 on light volume. Throughout the day, 3,188 shares of Industrial Services of America exchanged hands as compared to its average daily volume of 10,000 shares. The stock ranged in price between $4.78-$4.89 after having opened the day at $4.80 as compared to the previous trading day's close of $4.90.

Industrial Services of America, Inc. operates as a recycler of stainless steel, ferrous, and non-ferrous scrap. The company operates in two segments, Recycling and Waste Services. Industrial Services of America has a market cap of $34.6 million and is part of the consumer durables industry. Shares are up 54.6% year-to-date as of the close of trading on Tuesday.

TheStreet Ratings rates Industrial Services of America 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 and poor profit margins.

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Highlights from TheStreet Ratings analysis on IDSA go as follows:

  • INDUSTRIAL SERVICES AMER 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, INDUSTRIAL SERVICES AMER INC reported poor results of -$1.96 versus -$0.96 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 Commercial Services & Supplies industry. The net income has significantly decreased by 460.9% when compared to the same quarter one year ago, falling from -$0.12 million to -$0.65 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 Commercial Services & Supplies industry and the overall market, INDUSTRIAL SERVICES AMER INC's return on equity significantly trails that of both the industry average and the S&P 500.
  • The gross profit margin for INDUSTRIAL SERVICES AMER INC is currently extremely low, coming in at 6.10%. It has decreased from the same quarter the previous year. Along with this, the net profit margin of -2.51% trails that of the industry average.
  • IDSA, with its decline in revenue, underperformed when compared the industry average of 3.8%. Since the same quarter one year prior, revenues fell by 26.1%. The declining revenue appears to have seeped down to the company's bottom line, decreasing earnings per share.

You can view the full analysis from the report here: Industrial Services of America 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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