3 Stocks Pushing The Automotive 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 Automotive industry as a whole closed the day down 0.7% versus the S&P 500, which was down 0.7%. Laggards within the Automotive industry included China Automotive Systems ( CAAS), down 2.3%, Strattec Security ( STRT), down 2.1%, Stoneridge ( SRI), down 3.4%, Accuride ( ACW), down 2.4% and Shiloh Industries ( SHLO), down 2.9%.

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

Stoneridge ( SRI) is one of the companies that pushed the Automotive industry lower today. Stoneridge was down $0.36 (3.4%) to $10.54 on average volume. Throughout the day, 129,411 shares of Stoneridge exchanged hands as compared to its average daily volume of 153,700 shares. The stock ranged in price between $10.53-$10.91 after having opened the day at $10.86 as compared to the previous trading day's close of $10.91.

Stoneridge, Inc. designs and manufactures electrical and electronic components, modules, and systems for the commercial vehicle, automotive, agricultural, motorcycle, and off-highway vehicle markets in North America, South America, and Europe. Stoneridge has a market cap of $311.3 million and is part of the consumer goods sector. Shares are down 14.4% year-to-date as of the close of trading on Monday. Currently there is 1 analyst who rates Stoneridge a buy, no analysts rate it a sell, and 2 rate it a hold.

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TheStreet Ratings rates Stoneridge as a buy. The company's strengths can be seen in multiple areas, such as its revenue growth and notable return on equity. We feel these strengths outweigh the fact that the company has had lackluster performance in the stock itself.

Highlights from TheStreet Ratings analysis on SRI go as follows:

  • Despite its growing revenue, the company underperformed as compared with the industry average of 3.4%. Since the same quarter one year prior, revenues slightly increased by 0.3%. 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.
  • STONERIDGE 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. 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, STONERIDGE INC increased its bottom line by earning $0.56 versus $0.21 in the prior year. This year, the market expects an improvement in earnings ($0.65 versus $0.56).
  • Current return on equity exceeded its ROE from the same quarter one year prior. This is a clear sign of strength within the company. In comparison to the other companies in the Auto Components industry and the overall market, STONERIDGE INC's return on equity is significantly below that of the industry average and is below that of the S&P 500.
  • The debt-to-equity ratio of 1.33 is relatively high when compared with the industry average, suggesting a need for better debt level management. Even though the debt-to-equity ratio is weak, SRI's quick ratio is somewhat strong at 1.16, demonstrating the ability to handle short-term liquidity needs.
  • 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 64.4% when compared to the same quarter one year ago, falling from $4.12 million to $1.47 million.

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

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At the close, Strattec Security ( STRT) was down $1.48 (2.1%) to $67.25 on average volume. Throughout the day, 24,859 shares of Strattec Security exchanged hands as compared to its average daily volume of 17,900 shares. The stock ranged in price between $67.25-$69.69 after having opened the day at $68.05 as compared to the previous trading day's close of $68.73.

STRATTEC SECURITY CORPORATION is engaged in the design, development, manufacture, marketing, and export of automotive access control products. Strattec Security has a market cap of $252.0 million and is part of the consumer goods sector. Shares are up 53.9% year-to-date as of the close of trading on Monday. Currently there are no analysts who rate Strattec Security a buy, no analysts rate it a sell, and 1 rates 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 Strattec Security 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, impressive record of earnings per share growth, compelling growth in net income and solid stock price performance. We feel these strengths outweigh the fact that the company shows low profit margins.

Highlights from TheStreet Ratings analysis on STRT 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 14.2%. Growth in the company's revenue appears to have helped boost the earnings per share.
  • STRT's debt-to-equity ratio is very low at 0.02 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 1.29, which illustrates the ability to avoid short-term cash problems.
  • STRATTEC SECURITY CORP 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 two years. We feel that this trend should continue. During the past fiscal year, STRATTEC SECURITY CORP increased its bottom line by earning $2.72 versus $2.65 in the prior year. This year, the market expects an improvement in earnings ($4.19 versus $2.72).
  • The net income growth from the same quarter one year ago has significantly exceeded that of the S&P 500 and the Auto Components industry. The net income increased by 229.2% when compared to the same quarter one year prior, rising from $1.09 million to $3.60 million.
  • Powered by its strong earnings growth of 212.50% and other important driving factors, this stock has surged by 96.96% over the past year, outperforming the rise in the S&P 500 Index during the same period. Looking ahead, the stock's sharp rise over the last year has already helped drive it to a level which is relatively expensive compared to the rest of its industry. We feel, however, that other strengths this company displays justify these higher price levels.

You can view the full analysis from the report here: Strattec Security 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.

China Automotive Systems ( CAAS) was another company that pushed the Automotive industry lower today. China Automotive Systems was down $0.20 (2.3%) to $8.58 on light volume. Throughout the day, 88,550 shares of China Automotive Systems exchanged hands as compared to its average daily volume of 128,400 shares. The stock ranged in price between $8.50-$8.97 after having opened the day at $8.85 as compared to the previous trading day's close of $8.79.

China Automotive Systems, Inc., through its subsidiaries, manufactures and sells automotive systems and components in the People's Republic of China. China Automotive Systems has a market cap of $245.7 million and is part of the consumer goods sector. Shares are up 13.1% year-to-date as of the close of trading on Monday. Currently there are no analysts who rate China Automotive Systems a buy, no analysts rate it a sell, and 1 rates it a hold.

TheStreet Ratings rates China Automotive Systems as a buy. The company's strengths can be seen in multiple areas, such as its robust revenue growth, largely solid financial position with reasonable debt levels by most measures, attractive valuation levels, solid stock price performance and increase in net income. We feel these strengths outweigh the fact that the company has had somewhat disappointing return on equity.

STOCKS TO BUY: TheStreet Quant Ratings has identified a handful of stocks that can potentially TRIPLE in the next 12 months. Learn more.

Highlights from TheStreet Ratings analysis on CAAS 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 17.6%. This growth in revenue appears to have trickled down to the company's bottom line, improving the earnings per share.
  • The current debt-to-equity ratio, 0.49, is low and is below the industry average, implying that there has been successful management of debt levels. Along with the favorable debt-to-equity ratio, the company maintains an adequate quick ratio of 1.40, which illustrates the ability to avoid short-term cash problems.
  • Investors have apparently begun to recognize positive factors similar to those we have mentioned in this report, including earnings growth. This has helped drive up the company's shares by a sharp 69.76% over the past year, a rise that has exceeded that of the S&P 500 Index. Regarding the stock's future course, although almost any stock can fall in a broad market decline, CAAS should continue to move higher despite the fact that it has already enjoyed a very nice gain in the past year.
  • The net income growth from the same quarter one year ago has exceeded that of the Auto Components industry average, but is less than that of the S&P 500. The net income increased by 14.0% when compared to the same quarter one year prior, going from $5.94 million to $6.77 million.

You can view the full analysis from the report here: China Automotive Systems 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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