3 Stocks Pushing The Consumer 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 Consumer Goods sector as a whole closed the day down 0.4% versus the S&P 500, which was down 0.3%. Laggards within the Consumer Goods sector included Entertainment Gaming Asia ( EGT), down 4.2%, Tofutti Brands ( TOF), down 1.6%, Virco Manufacturing ( VIRC), down 3.1%, Koss ( KOSS), down 7.0% and Exceed ( EDS), down 7.1%.

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

Exceed ( EDS) is one of the companies that pushed the Consumer Goods sector lower today. Exceed was down $0.12 (7.1%) to $1.58 on heavy volume. Throughout the day, 44,360 shares of Exceed exchanged hands as compared to its average daily volume of 21,400 shares. The stock ranged in price between $1.57-$1.68 after having opened the day at $1.68 as compared to the previous trading day's close of $1.70.

Exceed Company Ltd. is engaged in the design, development, and wholesale of footwear, apparel, and accessories under the brand name of Xidelong in the People's Republic of China. Exceed has a market cap of $58.0 million and is part of the food & beverage industry. Shares are up 6.1% year-to-date as of the close of trading on Monday.

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TheStreet Ratings rates Exceed 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 disappointing return on equity, poor profit margins and weak operating cash flow.

Highlights from TheStreet Ratings analysis on EDS go as follows:

  • The revenue growth came in higher than the industry average of 8.7%. Since the same quarter one year prior, revenues rose by 33.7%. This growth in revenue appears to have trickled down to the company's bottom line, improving the earnings per share.
  • EDS'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 this, the company maintains a quick ratio of 12.21, which clearly demonstrates the ability to cover short-term cash needs.
  • EXCEED CO LTD reported significant earnings per share improvement 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, EXCEED CO LTD reported lower earnings of $0.33 versus $0.96 in the prior year.
  • The gross profit margin for EXCEED CO LTD is currently lower than what is desirable, coming in at 27.28%. It has decreased from the same quarter the previous year. Along with this, the net profit margin of 4.36% trails that of the industry average.
  • Net operating cash flow has significantly decreased to -$13.97 million or 293.04% when compared to the same quarter last year. In addition, when comparing to the industry average, the firm's growth rate is much lower.

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

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At the close, Virco Manufacturing ( VIRC) was down $0.08 (3.1%) to $2.50 on light volume. Throughout the day, 430 shares of Virco Manufacturing exchanged hands as compared to its average daily volume of 11,400 shares. The stock ranged in price between $2.42-$2.59 after having opened the day at $2.59 as compared to the previous trading day's close of $2.58.

Virco Mfg. Corporation is engaged in the design, production, and distribution of furniture for the commercial and education markets in the United States. Virco Manufacturing has a market cap of $36.9 million and is part of the food & beverage industry. Shares are up 12.5% year-to-date as of the close of trading on Monday. Currently there are no analysts who rate Virco Manufacturing a buy, no analysts rate it a sell, and 1 rates it a hold.

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TheStreet Ratings rates Virco Manufacturing as a sell. The area that we feel has been the company's primary weakness has been its unimpressive growth in net income.

Highlights from TheStreet Ratings analysis on VIRC go as follows:

  • The company, on the basis of net income growth from the same quarter one year ago, has significantly underperformed compared to the Commercial Services & Supplies industry average, but is greater than that of the S&P 500. The net income increased by 13.3% when compared to the same quarter one year prior, going from -$4.45 million to -$3.86 million.
  • The company's current return on equity greatly increased when compared to its ROE from the same quarter one year prior. This is a signal of significant strength within the corporation. Compared to other companies in the Commercial Services & Supplies industry and the overall market, VIRCO MFG. CORP's return on equity significantly trails that of both the industry average and the S&P 500.
  • The debt-to-equity ratio is somewhat low, currently at 0.85, and is less than that of the industry average, implying that there has been a relatively successful effort in the management of debt levels. Even though the company has a strong debt-to-equity ratio, the quick ratio of 0.27 is very weak and demonstrates a lack of ability to pay short-term obligations.
  • The stock price has risen over the past year, but it has underperformed the S&P 500 so far. Turning our attention to the future direction of the stock, we do not believe this stock offers ample reward opportunity to compensate for the risks, despite the fact that it rose over the past year.
  • 39.30% is the gross profit margin for VIRCO MFG. CORP which we consider to be strong. It has increased from the same quarter the previous year. Regardless of the strong results of the gross profit margin, the net profit margin of -16.38% is in-line with the industry average.

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

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Entertainment Gaming Asia ( EGT) was another company that pushed the Consumer Goods sector lower today. Entertainment Gaming Asia was down $0.03 (4.2%) to $0.69 on heavy volume. Throughout the day, 24,064 shares of Entertainment Gaming Asia exchanged hands as compared to its average daily volume of 10,600 shares. The stock ranged in price between $0.68-$0.74 after having opened the day at $0.74 as compared to the previous trading day's close of $0.72.

Entertainment Gaming Asia Inc. engages in the ownership and leasing of electronic gaming machines (EGMs) in resorts, hotels, and other venues primarily in Cambodia and the Philippines. Entertainment Gaming Asia has a market cap of $23.5 million and is part of the food & beverage industry. Shares are down 37.1% year-to-date as of the close of trading on Monday.

TheStreet Ratings rates Entertainment Gaming Asia as a sell. The company's weaknesses can be seen in multiple areas, such as its feeble growth in its earnings per share, disappointing return on equity and generally disappointing historical performance in the stock itself.

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Highlights from TheStreet Ratings analysis on EGT go as follows:

  • ENTERTAINMENT GAMING ASIA 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, ENTERTAINMENT GAMING ASIA swung to a loss, reporting -$0.17 versus $0.07 in the prior year.
  • 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 Hotels, Restaurants & Leisure industry and the overall market, ENTERTAINMENT GAMING ASIA's return on equity significantly trails that of both the industry average and the S&P 500.
  • Despite any intermediate fluctuations, we have only bad news to report on this stock's performance over the last year: it has tumbled by 53.85%, worse than the S&P 500's performance. Consistent with the plunge in the stock price, the company's earnings per share are down 200.00% compared to the year-earlier quarter. 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.
  • The gross profit margin for ENTERTAINMENT GAMING ASIA is rather high; currently it is at 50.61%. Regardless of EGT's high profit margin, it has managed to decrease from the same period last year. Despite the mixed results of the gross profit margin, EGT's net profit margin of -20.97% significantly underperformed when compared to the industry average.
  • EGT, with its decline in revenue, underperformed when compared the industry average of 6.5%. Since the same quarter one year prior, revenues fell by 29.0%. 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: Entertainment Gaming Asia 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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