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 0.2%. Laggards within the Consumer Goods sector included Entertainment Gaming Asia ( EGT), down 1.5%, China Shengda Packaging Group ( CPGI), down 2.2%, BRASILAGRO - CIA Bras de Prop Agricolas ( LND), down 1.9%, Ocean Bio-Chem ( OBCI), down 1.6% and Tofutti Brands ( TOF), down 3.9%.

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

Flowers Foods ( FLO) is one of the companies that pushed the Consumer Goods sector lower today. Flowers Foods was down $0.96 (4.8%) to $19.05 on heavy volume. Throughout the day, 3,908,993 shares of Flowers Foods exchanged hands as compared to its average daily volume of 1,002,200 shares. The stock ranged in price between $18.50-$19.44 after having opened the day at $18.52 as compared to the previous trading day's close of $20.01.

Flowers Foods, Inc. produces and markets bakery foods in the United States. It operates in two segments, Direct-Store-Delivery (DSD) and Warehouse Delivery. The DSD segment produces and markets fresh bakery foods, including fresh breads, buns, rolls, tortillas, and snack cakes. Flowers Foods has a market cap of $4.2 billion and is part of the food & beverage industry. Shares are down 6.8% year-to-date as of the close of trading on Monday. Currently there are 5 analysts who rate Flowers Foods a buy, no analysts rate it a sell, and 1 rates it a hold.

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TheStreet Ratings rates Flowers Foods as a buy. The company's strengths can be seen in multiple areas, such as its revenue growth, reasonable valuation levels, good cash flow from operations, expanding profit margins and largely solid financial position with reasonable debt levels by most measures. We feel these strengths outweigh the fact that the company has had lackluster performance in the stock itself.

Highlights from TheStreet Ratings analysis on FLO go as follows:

  • Despite its growing revenue, the company underperformed as compared with the industry average of 3.0%. Since the same quarter one year prior, revenues slightly increased by 2.6%. 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.
  • Net operating cash flow has increased to $121.82 million or 40.29% when compared to the same quarter last year. The firm also exceeded the industry average cash flow growth rate of 3.81%.
  • 48.62% is the gross profit margin for FLOWERS FOODS INC 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 5.26% trails the industry average.
  • The debt-to-equity ratio is somewhat low, currently at 0.75, and is less than that of the industry average, implying that there has been a relatively successful effort in the management of debt levels. Although the company had a strong debt-to-equity ratio, its quick ratio of 0.80 is somewhat weak and could be cause for future problems.

You can view the full analysis from the report here: Flowers Foods 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, China Shengda Packaging Group ( CPGI) was down $0.02 (2.2%) to $0.90 on heavy volume. Throughout the day, 45,259 shares of China Shengda Packaging Group exchanged hands as compared to its average daily volume of 12,200 shares. The stock ranged in price between $0.86-$0.92 after having opened the day at $0.92 as compared to the previous trading day's close of $0.92.

China Shengda Packaging Group Inc., a paper packaging company, designs, manufactures, and sells flexo-printed and color-printed corrugated paper cartons of various sizes and strengths primarily in the People's Republic of China. China Shengda Packaging Group has a market cap of $36.5 million and is part of the food & beverage industry. Shares are up 10.6% year-to-date as of the close of trading on Monday.

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 China Shengda Packaging Group 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 good cash flow from operations. However, as a counter to these strengths, we also find weaknesses including a generally disappointing performance in the stock itself, feeble growth in the company's earnings per share and deteriorating net income.

Highlights from TheStreet Ratings analysis on CPGI go as follows:

  • The revenue growth came in higher than the industry average of 7.2%. Since the same quarter one year prior, revenues rose by 19.2%. 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.
  • CPGI's debt-to-equity ratio is very low at 0.22 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 1.16, which illustrates the ability to avoid short-term cash problems.
  • 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 Containers & Packaging industry and the overall market, CHINA SHENGDA PACKAGING GP's return on equity significantly trails that of both the industry average and the S&P 500.
  • The gross profit margin for CHINA SHENGDA PACKAGING GP is rather low; currently it is at 19.13%. It has decreased from the same quarter the previous year. Along with this, the net profit margin of -1.66% trails that of the industry average.

You can view the full analysis from the report here: China Shengda Packaging 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.

Entertainment Gaming Asia ( EGT) was another company that pushed the Consumer Goods sector lower today. Entertainment Gaming Asia was down $0.01 (1.5%) to $0.65 on heavy volume. Throughout the day, 19,740 shares of Entertainment Gaming Asia exchanged hands as compared to its average daily volume of 13,100 shares. The stock ranged in price between $0.65-$0.67 after having opened the day at $0.67 as compared to the previous trading day's close of $0.66.

Entertainment Gaming Asia Inc., a gaming company, owns and leases electronic gaming machines (EGMs) in resorts, hotels, and other venues in Cambodia and the Philippines. It operates in two segments, Gaming Operations and Gaming Products. Entertainment Gaming Asia has a market cap of $20.7 million and is part of the food & beverage industry. Shares are down 44.5% 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.

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 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 56.84%, 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 5.8%. 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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