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 up 0.2% versus the S&P 500, which was up 0.6%. Laggards within the Consumer Goods sector included CTI Industries ( CTIB), down 4.0%, Global-Tech Advanced Innovations ( GAI), down 2.8%, DS Healthcare Group ( DSKX), down 5.2%, American Lorain ( ALN), down 1.6% and Orient Paper ( ONP), down 2.3%.

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

American Lorain ( ALN) is one of the companies that pushed the Consumer Goods sector lower today. American Lorain was down $0.02 (1.6%) to $1.24 on light volume. Throughout the day, 6,440 shares of American Lorain exchanged hands as compared to its average daily volume of 35,600 shares. The stock ranged in price between $1.21-$1.27 after having opened the day at $1.27 as compared to the previous trading day's close of $1.26.

American Lorain Corporation, through its subsidiaries, develops, manufactures, and sells various food products in the People's Republic of China. It provides chestnut products, including aerated open-bottom chestnuts, sweetheart chestnuts, chestnuts in syrup, and golden chestnut kernels. American Lorain has a market cap of $42.9 million and is part of the consumer non-durables industry. Shares are up 59.5% year-to-date as of the close of trading on Tuesday.

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TheStreet Ratings rates American Lorain as a hold. The company's strengths can be seen in multiple areas, such as its solid stock price performance, 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 feeble growth in the company's earnings per share, deteriorating net income and disappointing return on equity.

Highlights from TheStreet Ratings analysis on ALN go as follows:

  • Compared to its closing price of one year ago, ALN's share price has jumped by 33.33%, exceeding the performance of the broader market during that same time frame. 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.
  • The current debt-to-equity ratio, 0.51, is low and is below the industry average, implying that there has been successful management of debt levels. To add to this, ALN has a quick ratio of 1.68, which demonstrates the ability of the company to cover short-term liquidity needs.
  • ALN, with its decline in revenue, underperformed when compared the industry average of 3.0%. Since the same quarter one year prior, revenues slightly dropped by 9.0%. The declining revenue appears to have seeped down to the company's bottom line, decreasing earnings per share.
  • AMERICAN LORAIN CORP's earnings per share declined by 28.6% in the most recent quarter compared to 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, AMERICAN LORAIN CORP reported lower earnings of $0.47 versus $0.59 in the prior year.
  • 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 Food Products industry. The net income has significantly decreased by 36.9% when compared to the same quarter one year ago, falling from $2.52 million to $1.59 million.

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

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At the close, DS Healthcare Group ( DSKX) was down $0.07 (5.2%) to $1.29 on light volume. Throughout the day, 6,902 shares of DS Healthcare Group exchanged hands as compared to its average daily volume of 12,800 shares. The stock ranged in price between $1.29-$1.38 after having opened the day at $1.38 as compared to the previous trading day's close of $1.36.

DS Healthcare Group has a market cap of $20.1 million and is part of the consumer non-durables industry. Shares are down 49.0% year-to-date as of the close of trading on Tuesday.

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CTI Industries ( CTIB) was another company that pushed the Consumer Goods sector lower today. CTI Industries was down $0.18 (4.0%) to $4.37 on heavy volume. Throughout the day, 5,906 shares of CTI Industries exchanged hands as compared to its average daily volume of 2,300 shares. The stock ranged in price between $4.37-$4.53 after having opened the day at $4.53 as compared to the previous trading day's close of $4.55.

CTI Industries Corporation develops, manufactures, and supplies flexible film products for novelty, packaging and container, and custom product applications worldwide. CTI Industries has a market cap of $15.0 million and is part of the consumer non-durables industry. Shares are down 22.1% year-to-date as of the close of trading on Tuesday.

TheStreet Ratings rates CTI Industries as a sell. The company's weaknesses can be seen in multiple areas, such as its generally disappointing historical performance in the stock itself, unimpressive growth in net income, generally high debt management risk and poor profit margins.

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Highlights from TheStreet Ratings analysis on CTIB go as follows:

  • The share price of CTI INDUSTRIES CORP has not done very well: it is down 18.36% and has underperformed the S&P 500, in part reflecting the company's sharply declining earnings per share when compared to the year-earlier quarter. Looking ahead, other than the push or pull of the broad market, we do not see anything in the company's numbers that may help reverse the decline experienced over the past 12 months. Despite the past decline, the stock is still selling for more than most others in its industry.
  • The company, on the basis of change in net income from the same quarter one year ago, has significantly underperformed against the S&P 500 and did not exceed that of the Household Durables industry. The net income has significantly decreased by 65.4% when compared to the same quarter one year ago, falling from $0.13 million to $0.05 million.
  • The debt-to-equity ratio of 1.30 is relatively high when compared with the industry average, suggesting a need for better debt level management. To add to this, CTIB has a quick ratio of 0.59, this demonstrates the lack of ability of the company to cover short-term liquidity needs.
  • The gross profit margin for CTI INDUSTRIES CORP is currently lower than what is desirable, coming in at 27.08%. Regardless of CTIB'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 0.30% trails the industry average.
  • The return on equity has improved slightly when compared to the same quarter one year prior. This can be construed as a modest strength in the organization. Compared to other companies in the Household Durables industry and the overall market, CTI INDUSTRIES CORP'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: CTI Industries 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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