3 Stocks Pushing The Industrial Goods Sector Lower

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The Industrial Goods sector as a whole closed the day down 2.0% versus the S&P 500, which was down 1.8%. Laggards within the Industrial Goods sector included Bonso Electronics International ( BNSO), down 6.3%, Lime Energy ( LIME), down 1.8%, Micronet Enertec Technologies ( MICT), down 3.0%, Ultralife Batteries ( ULBI), down 8.3% and Jewett-Cameron Trading ( JCTCF), down 4.0%.

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 $0.66 (2.1%) to $30.88 on heavy volume. Throughout the day, 1,110,481 shares of Royal Philips exchanged hands as compared to its average daily volume of 709,900 shares. The stock ranged in price between $30.83-$31.17 after having opened the day at $31.04 as compared to the previous trading day's close of $31.54.

Koninklijke Philips N.V. is engaged in healthcare, consumer lifestyle, and lighting businesses worldwide. Royal Philips has a market cap of $29.3 billion and is part of the consumer durables industry. Shares are down 14.7% year-to-date as of the close of trading on Wednesday. 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 buy. The company's strengths can be seen in multiple areas, such as its good cash flow from operations, largely solid financial position with reasonable debt levels by most measures, expanding profit margins and notable return on equity. We feel these strengths outweigh the fact that the company has had sub par growth in net income.

Highlights from TheStreet Ratings analysis on PHG go as follows:

  • Net operating cash flow has significantly increased by 1146.80% to $614.04 million when compared to the same quarter last year. In addition, KONINKLIJKE PHILIPS NV has also vastly surpassed the industry average cash flow growth rate of -65.57%.
  • The current debt-to-equity ratio, 0.35, 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 0.76 is somewhat weak and could be cause for future problems.
  • 46.82% is the gross profit margin for KONINKLIJKE PHILIPS NV which we consider to be strong. Regardless of PHG's high profit margin, it has managed to decrease from the same period last year. Despite the mixed results of the gross profit margin, the net profit margin of 4.58% trails the industry average.
  • PHG, with its decline in revenue, slightly underperformed the industry average of 0.4%. Since the same quarter one year prior, revenues slightly dropped by 3.0%. Weakness in the company's revenue seems to have hurt the bottom line, decreasing earnings per share.
  • Current return on equity exceeded its ROE from the same quarter one year prior. This is a clear sign of strength within the company. When compared to other companies in the Industrial Conglomerates industry and the overall market, KONINKLIJKE PHILIPS NV's return on equity is below that of both the industry average and the S&P 500.

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

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At the close, Ultralife Batteries ( ULBI) was down $0.32 (8.3%) to $3.52 on heavy volume. Throughout the day, 49,891 shares of Ultralife Batteries exchanged hands as compared to its average daily volume of 10,400 shares. The stock ranged in price between $3.52-$3.83 after having opened the day at $3.83 as compared to the previous trading day's close of $3.84.

Ultralife Corporation offers power and communications solutions in the United States and internationally. It operates through two segments, Battery & Energy Products and Communications Systems. Ultralife Batteries has a market cap of $66.1 million and is part of the consumer durables industry. Shares are up 8.2% year-to-date as of the close of trading on Wednesday.

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TheStreet Ratings rates Ultralife Batteries as a sell. The company's weaknesses can be seen in multiple areas, such as its deteriorating net income, disappointing return on equity, poor profit margins and feeble growth in its earnings per share.

Highlights from TheStreet Ratings analysis on ULBI go as follows:

  • 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 Electrical Equipment industry. The net income has significantly decreased by 396.3% when compared to the same quarter one year ago, falling from $0.43 million to -$1.29 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. Compared to other companies in the Electrical Equipment industry and the overall market, ULTRALIFE CORP's return on equity significantly trails that of both the industry average and the S&P 500.
  • The gross profit margin for ULTRALIFE CORP is currently lower than what is desirable, coming in at 32.72%. It has decreased from the same quarter the previous year. Along with this, the net profit margin of -8.41% is significantly below that of the industry average.
  • ULTRALIFE 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. Stable Earnings per share over the past year indicate the company has sound management over its earnings and share float. During the past fiscal year, ULTRALIFE CORP's EPS of -$0.05 remained unchanged from the prior years' EPS of -$0.05.
  • In its most recent trading session, ULBI 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. Regardless of the rise in share value over the previous year, we feel that the risks involved in investing in this stock do not compensate for any future upside potential.

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

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Lime Energy ( LIME) was another company that pushed the Industrial Goods sector lower today. Lime Energy was down $0.04 (1.8%) to $2.25 on light volume. Throughout the day, 5,692 shares of Lime Energy exchanged hands as compared to its average daily volume of 10,000 shares. The stock ranged in price between $2.20-$2.25 after having opened the day at $2.25 as compared to the previous trading day's close of $2.29.

Lime Energy Co. is engaged in designing and implementing energy efficiency programs for utilities in the United States. Lime Energy has a market cap of $8.5 million and is part of the consumer durables industry. Shares are down 20.8% year-to-date as of the close of trading on Wednesday.

TheStreet Ratings rates Lime Energy as a sell. The company's weaknesses can be seen in multiple areas, such as its weak operating cash flow, poor profit margins and generally disappointing historical performance in the stock itself.

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Highlights from TheStreet Ratings analysis on LIME go as follows:

  • Net operating cash flow has significantly decreased to -$6.94 million or 339.08% when compared to the same quarter last year. In addition, when comparing to the industry average, the firm's growth rate is much lower.
  • The gross profit margin for LIME ENERGY CO is currently lower than what is desirable, coming in at 31.90%. Regardless of LIME's low profit margin, it has managed to increase from the same period last year. Despite the mixed results of the gross profit margin, LIME's net profit margin of -9.51% significantly underperformed when compared to the industry average.
  • LIME's stock share price has done very poorly compared to where it was a year ago: Despite any rallies, the net result is that it is down by 63.50%, which is also worse that the performance of the S&P 500 Index. Investors have so far failed to pay much attention to the earnings improvements the company has managed to achieve over the last quarter. Naturally, the overall market trend is bound to be a significant factor. However, in one sense, the stock's sharp decline last year is a positive for future investors, making it cheaper (in proportion to its earnings over the past year) than most other stocks in its industry. But due to other concerns, we feel the stock is still not a good buy right now.
  • 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 Electrical Equipment industry and the overall market, LIME ENERGY CO's return on equity significantly trails that of both the industry average and the S&P 500.
  • LIME 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. Despite the fact that LIME's debt-to-equity ratio is low, the quick ratio, which is currently 0.63, displays a potential problem in covering short-term cash needs.

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

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