3 Stocks Raising The Automotive Industry Higher

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.

All three major indices are trading down today with the Dow Jones Industrial Average ( ^DJI) trading down 55.93 points (-0.3%) at 16,507 as of Friday, Aug. 1, 2014, 3:55 PM ET. The NYSE advances/declines ratio sits at 1,028 issues advancing vs. 2,012 declining with 122 unchanged.

The Automotive industry as a whole closed the day down 1.0% versus the S&P 500, which was down 0.1%. Top gainers within the Automotive industry included Sypris Solutions ( SYPR), up 3.0%, Gentherm ( THRM), up 5.7% and Tesla Motors ( TSLA), up 4.7%.

TheStreet Ratings Group would like to highlight 3 stocks pushing the industry higher today:

Tesla Motors ( TSLA) is one of the companies that pushed the Automotive industry higher today. Tesla Motors was up $10.42 (4.7%) to $233.72 on heavy volume. Throughout the day, 10,987,483 shares of Tesla Motors exchanged hands as compared to its average daily volume of 5,722,300 shares. The stock ranged in a price between $226.00-$237.50 after having opened the day at $226.09 as compared to the previous trading day's close of $223.30.

Tesla Motors, Inc. designs, develops, manufactures, and sells electric vehicles and electric vehicle powertrain components. Tesla Motors has a market cap of $28.4 billion and is part of the consumer goods sector. Shares are up 48.4% year-to-date as of the close of trading on Thursday. Currently there are 5 analysts who rate Tesla Motors a buy, 1 analyst rates it a sell, and 6 rate 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 Tesla Motors as a hold. The company's strengths can be seen in multiple areas, such as its solid stock price performance, revenue growth and notable return on equity. However, as a counter to these strengths, we also find weaknesses including unimpressive growth in net income, weak operating cash flow and poor profit margins.

Highlights from TheStreet Ratings analysis on TSLA go as follows:

  • This stock has managed to rise its share value by 83.68% over the past twelve months. Regarding the stock's future course, our hold rating indicates that we do not recommend additional investment in this stock despite its gains in the past year.
  • TSLA's revenue growth trails the industry average of 21.5%. Since the same quarter one year prior, revenues rose by 10.4%. 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.
  • TESLA MOTORS INC's earnings have gone downhill when comparing its most recently reported quarter with the same quarter a year earlier. 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, TESLA MOTORS INC continued to lose money by earning -$0.71 versus -$3.70 in the prior year. This year, the market expects an improvement in earnings ($1.20 versus -$0.71).
  • Net operating cash flow has declined marginally to $60.64 million or 5.36% when compared to the same quarter last year. In addition, when comparing the cash generation rate to the industry average, the firm's growth is significantly lower.
  • 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 Automobiles industry. The net income has significantly decreased by 542.7% when compared to the same quarter one year ago, falling from $11.25 million to -$49.80 million.

You can view the full analysis from the report here: Tesla Motors 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.

At the close, Gentherm ( THRM) was up $2.38 (5.7%) to $44.23 on heavy volume. Throughout the day, 1,284,044 shares of Gentherm exchanged hands as compared to its average daily volume of 599,400 shares. The stock ranged in a price between $42.06-$44.80 after having opened the day at $42.75 as compared to the previous trading day's close of $41.85.

Gentherm Incorporated designs, develops, and manufactures thermal management technologies and cable systems worldwide. It operates through three segments: Climate Controlled Seats (CCS), Advanced Technology, and W.E.T. Gentherm has a market cap of $1.5 billion and is part of the consumer goods sector. Shares are up 56.1% year-to-date as of the close of trading on Thursday. Currently there are 4 analysts who rate Gentherm a buy, no analysts rate it a sell, and 3 rate 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 Gentherm 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, impressive record of earnings per share growth, compelling growth in net income and notable return on equity. We feel these strengths outweigh the fact that the company is trading at a premium valuation based on our review of its current price compared to such things as earnings and book value.

Highlights from TheStreet Ratings analysis on THRM go as follows:

  • The revenue growth came in higher than the industry average of 3.3%. Since the same quarter one year prior, revenues rose by 30.9%. Growth in the company's revenue appears to have helped boost the earnings per share.
  • The current debt-to-equity ratio, 0.36, 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 1.26, which illustrates the ability to avoid short-term cash problems.
  • GENTHERM 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 two years. We feel that this trend should continue. During the past fiscal year, GENTHERM INC increased its bottom line by earning $0.94 versus $0.39 in the prior year. This year, the market expects an improvement in earnings ($1.57 versus $0.94).
  • 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 91.6% when compared to the same quarter one year prior, rising from $8.65 million to $16.58 million.
  • Current return on equity exceeded its ROE from the same quarter one year prior. This is a clear sign of strength within the company. Compared to other companies in the Auto Components industry and the overall market on the basis of return on equity, GENTHERM INC has underperformed in comparison with the industry average, but has exceeded that of the S&P 500.

You can view the full analysis from the report here: Gentherm 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.

Sypris Solutions ( SYPR) was another company that pushed the Automotive industry higher today. Sypris Solutions was up $0.14 (3.0%) to $4.88 on light volume. Throughout the day, 5,614 shares of Sypris Solutions exchanged hands as compared to its average daily volume of 132,100 shares. The stock ranged in a price between $4.69-$4.88 after having opened the day at $4.71 as compared to the previous trading day's close of $4.74.

Sypris Solutions, Inc. provides outsourced services and specialty products primarily in the United States, Mexico, Denmark, and the United Kingdom. Sypris Solutions has a market cap of $100.1 million and is part of the consumer goods sector. Shares are up 54.9% year-to-date as of the close of trading on Thursday. Currently there are no analysts who rate Sypris Solutions a buy, no analysts rate it a sell, and none rate it a hold.

TheStreet Ratings rates Sypris Solutions as a hold. The company's strengths can be seen in multiple areas, such as its revenue growth, solid stock price performance and compelling growth in net income. However, as a counter to these strengths, we also find weaknesses including disappointing return on equity and poor profit margins.

Highlights from TheStreet Ratings analysis on SYPR go as follows:

  • SYPR's revenue growth has slightly outpaced the industry average of 3.3%. Since the same quarter one year prior, revenues slightly increased by 7.4%. Growth in the company's revenue appears to have helped boost the earnings per share.
  • Powered by its strong earnings growth of 123.52% and other important driving factors, this stock has surged by 53.77% over the past year, outperforming the rise in the S&P 500 Index during the same period. Regarding the stock's future course, our hold rating indicates that we do not recommend additional investment in this stock despite its gains in the past year.
  • SYPRIS SOLUTIONS INC reported significant earnings per share improvement 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, SYPRIS SOLUTIONS INC swung to a loss, reporting -$0.52 versus $0.52 in the prior year. This year, the market expects an improvement in earnings ($0.28 versus -$0.52).
  • The gross profit margin for SYPRIS SOLUTIONS INC is rather low; currently it is at 15.76%. Regardless of SYPR's low profit margin, it has managed to increase from the same period last year. Despite the mixed results of the gross profit margin, the net profit margin of 1.96% trails the industry average.
  • 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 Auto Components industry and the overall market, SYPRIS SOLUTIONS INC's return on equity significantly trails that of both the industry average and the S&P 500.

You can view the full analysis from the report here: Sypris Solutions 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.

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.

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