3 Consumer Non-Durables Stocks Pushing Industry Growth

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 134.49 points (-0.8%) at 16,435 as of Tuesday, Aug. 5, 2014, 3:55 PM ET. The NYSE advances/declines ratio sits at 814 issues advancing vs. 2,221 declining with 117 unchanged.

The Consumer Non-Durables industry as a whole was unchanged today versus the S&P 500, which was down 0.9%. Top gainers within the Consumer Non-Durables industry included China Xiniya Fashion ( XNY), up 3.7%, STR Holdings ( STRI), up 2.3%, Superior Uniform Group ( SGC), up 5.7%, Weyco Group ( WEYS), up 2.1% and Swisher Hygiene ( SWSH), up 1.5%.

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

Weyco Group ( WEYS) is one of the companies that pushed the Consumer Non-Durables industry higher today. Weyco Group was up $0.53 (2.1%) to $26.27 on light volume. Throughout the day, 7,866 shares of Weyco Group exchanged hands as compared to its average daily volume of 13,000 shares. The stock ranged in a price between $25.70-$26.70 after having opened the day at $25.72 as compared to the previous trading day's close of $25.74.

Weyco Group, Inc., together with its subsidiaries, is engaged in the distribution and retail of footwear. It operates in two segments, North American Wholesale and North American Retail. Weyco Group has a market cap of $282.9 million and is part of the consumer goods sector. Shares are down 12.5% year-to-date as of the close of trading on Monday. Currently there are no analysts who rate Weyco Group a buy, no analysts rate it a sell, and none rate it a hold.

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TheStreet Ratings rates Weyco Group 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, good cash flow from operations, increase in net income and expanding profit margins. We feel these strengths outweigh the fact that the company has had somewhat disappointing return on equity.

Highlights from TheStreet Ratings analysis on WEYS go as follows:

  • Despite its growing revenue, the company underperformed as compared with the industry average of 9.0%. Since the same quarter one year prior, revenues slightly increased by 1.8%. 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.
  • WEYS's debt-to-equity ratio is very low at 0.05 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 2.85, which clearly demonstrates the ability to cover short-term cash needs.
  • Net operating cash flow has significantly increased by 125.32% to $8.30 million when compared to the same quarter last year. In addition, WEYCO GROUP INC has also vastly surpassed the industry average cash flow growth rate of -14.05%.
  • The net income growth from the same quarter one year ago has exceeded that of the Distributors industry average, but is less than that of the S&P 500. The net income increased by 0.1% when compared to the same quarter one year prior, going from $3.20 million to $3.21 million.
  • 37.88% is the gross profit margin for WEYCO GROUP INC which we consider to be strong. Regardless of WEYS'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 4.27% trails the industry average.

You can view the full analysis from the report here: Weyco Group 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, STR Holdings ( STRI) was up $0.03 (2.3%) to $1.31 on light volume. Throughout the day, 64,543 shares of STR Holdings exchanged hands as compared to its average daily volume of 107,100 shares. The stock ranged in a price between $1.26-$1.34 after having opened the day at $1.28 as compared to the previous trading day's close of $1.28.

STR Holdings, Inc., together with its subsidiaries, designs, develops, manufactures, and sells encapsulants for solar module manufacturers worldwide. Its encapsulants protect the embedded semiconductor circuits of solar panels. STR Holdings has a market cap of $33.5 million and is part of the consumer goods sector. Shares are down 18.5% year-to-date as of the close of trading on Monday. Currently there are no analysts who rate STR Holdings 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 STR Holdings as a sell. The company's weaknesses can be seen in multiple areas, such as its unimpressive growth in net income, weak operating cash flow and generally disappointing historical performance in the stock itself.

Highlights from TheStreet Ratings analysis on STRI go as follows:

  • The company, on the basis of change in net income from the same quarter one year ago, has underperformed when compared to that of the S&P 500 and greatly underperformed compared to the Semiconductors & Semiconductor Equipment industry average. The net income has decreased by 10.3% when compared to the same quarter one year ago, dropping from -$4.21 million to -$4.64 million.
  • Net operating cash flow has significantly decreased to -$4.91 million or 67.87% when compared to the same quarter last year. In addition, when comparing to the industry average, the firm's growth rate is much lower.
  • Looking at the price performance of STRI's shares over the past 12 months, there is not much good news to report: the stock is down 52.44%, and it has underformed the S&P 500 Index. In addition, the company's earnings per share are lower today than the year-earlier 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 Semiconductors & Semiconductor Equipment industry and the overall market, STR HOLDINGS INC's return on equity significantly trails that of both the industry average and the S&P 500.
  • STRI, with its decline in revenue, underperformed when compared the industry average of 8.4%. Since the same quarter one year prior, revenues fell by 16.8%. 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: STR Holdings 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 Xiniya Fashion ( XNY) was another company that pushed the Consumer Non-Durables industry higher today. China Xiniya Fashion was up $0.03 (3.7%) to $0.85 on light volume. Throughout the day, 8,900 shares of China Xiniya Fashion exchanged hands as compared to its average daily volume of 33,100 shares. The stock ranged in a price between $0.84-$0.85 after having opened the day at $0.84 as compared to the previous trading day's close of $0.82.

China Xiniya Fashion Limited designs, manufactures, and sells men's business casual and business formal apparel and accessories to retail customers in the People's Republic of China. China Xiniya Fashion has a market cap of $47.3 million and is part of the consumer goods sector. Shares are down 37.4% year-to-date as of the close of trading on Monday. Currently there are no analysts who rate China Xiniya Fashion a buy, no analysts rate it a sell, and none rate it a hold.

TheStreet Ratings rates China Xiniya Fashion as a hold. The company's strengths can be seen in multiple areas, such as its largely solid financial position with reasonable debt levels by most measures, attractive valuation levels and good cash flow from operations. However, as a counter to these strengths, we also find weaknesses including feeble growth in the company's earnings per share, deteriorating net income and disappointing return on equity.

Highlights from TheStreet Ratings analysis on XNY go as follows:

  • XNY 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 9.03, which clearly demonstrates the ability to cover short-term cash needs.
  • XNY, with its decline in revenue, underperformed when compared the industry average of 8.3%. Since the same quarter one year prior, revenues slightly dropped by 7.6%. The declining revenue appears to have seeped down to the company's bottom line, decreasing earnings per share.
  • 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 Textiles, Apparel & Luxury Goods industry. The net income has decreased by 20.0% when compared to the same quarter one year ago, dropping from $5.35 million to $4.28 million.
  • Current return on equity is lower than its ROE from the same quarter one year prior. This is a clear sign of weakness within the company. In comparison to the other companies in the Textiles, Apparel & Luxury Goods industry and the overall market, CHINA XINIYA FASHION LTD-ADR's return on equity is significantly below that of the industry average and is below that of the S&P 500.

You can view the full analysis from the report here: China Xiniya Fashion 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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