3 Stocks Pushing The Industrial Industry 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 Industrial industry as a whole closed the day down 0.2% versus the S&P 500, which was up 0.2%. Laggards within the Industrial industry included Global-Tech Advanced Innovations ( GAI), down 2.3%, Bonso Electronics International ( BNSO), down 5.0%, Intelligent Systems ( INS), down 4.0%, American Electric Technologies ( AETI), down 1.9% and LSI Industries ( LYTS), down 5.1%.

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

Regal-Beloit ( RBC) is one of the companies that pushed the Industrial industry lower today. Regal-Beloit was down $1.13 (1.6%) to $70.03 on heavy volume. Throughout the day, 484,095 shares of Regal-Beloit exchanged hands as compared to its average daily volume of 247,500 shares. The stock ranged in price between $68.89-$70.38 after having opened the day at $70.22 as compared to the previous trading day's close of $71.16.

Regal Beloit Corporation, together with its subsidiaries, designs, manufactures, and sells electric motors and controls, electric generators and controls, low and medium voltage drives and soft starters, and mechanical motion control products in the United States and internationally. Regal-Beloit has a market cap of $3.2 billion and is part of the industrial goods sector. Shares are down 3.5% year-to-date as of the close of trading on Tuesday. Currently there are 5 analysts who rate Regal-Beloit a buy, no analysts rate it a sell, and 5 rate it a hold.

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TheStreet Ratings rates Regal-Beloit 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 growth in earnings per share. We feel these strengths outweigh the fact that the company has had somewhat disappointing return on equity.

Highlights from TheStreet Ratings analysis on RBC go as follows:

  • RBC's revenue growth has slightly outpaced the industry average of 6.5%. Since the same quarter one year prior, revenues slightly increased by 3.5%. 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 1.33, which illustrates the ability to avoid short-term cash problems.
  • The net income growth from the same quarter one year ago has exceeded that of the S&P 500 and the Electrical Equipment industry average. The net income increased by 10.0% when compared to the same quarter one year prior, going from $51.10 million to $56.20 million.
  • Net operating cash flow has slightly increased to $99.50 million or 8.98% when compared to the same quarter last year. In addition, REGAL-BELOIT CORP has also modestly surpassed the industry average cash flow growth rate of 3.06%.
  • REGAL-BELOIT CORP has improved earnings per share by 9.7% 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, REGAL-BELOIT CORP reported lower earnings of $2.64 versus $4.64 in the prior year. This year, the market expects an improvement in earnings ($4.40 versus $2.64).

You can view the full analysis from the report here: Regal-Beloit 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, LSI Industries ( LYTS) was down $0.37 (5.1%) to $6.88 on average volume. Throughout the day, 42,348 shares of LSI Industries exchanged hands as compared to its average daily volume of 38,600 shares. The stock ranged in price between $6.83-$7.27 after having opened the day at $7.18 as compared to the previous trading day's close of $7.25.

LSI Industries Inc. provides corporate visual image solutions. Its Lighting segment manufactures and markets outdoor and indoor lighting products for the commercial, industrial, and multi-site retail lighting markets, including the petroleum/convenience store market. LSI Industries has a market cap of $177.2 million and is part of the industrial goods sector. Shares are down 16.4% year-to-date as of the close of trading on Tuesday.

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TheStreet Ratings rates LSI Industries 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, unimpressive growth in net income and poor profit margins.

Highlights from TheStreet Ratings analysis on LYTS go as follows:

  • The revenue growth came in higher than the industry average of 6.5%. Since the same quarter one year prior, revenues slightly increased by 4.3%. 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.
  • LYTS 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. To add to this, LYTS has a quick ratio of 1.88, which demonstrates the ability of the company to cover short-term liquidity needs.
  • The share price of LSI INDUSTRIES INC has not done very well: it is down 8.35% 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, we do not see anything in this company's numbers that would change the one-year trend. It was down over the last twelve months; and it could be down again in the next twelve. Naturally, a bull or bear market could sway the movement of this stock.
  • The gross profit margin for LSI INDUSTRIES INC is rather low; currently it is at 22.22%. It has decreased from the same quarter the previous year. Along with this, the net profit margin of -1.46% trails that of the industry average.

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

American Electric Technologies ( AETI) was another company that pushed the Industrial industry lower today. American Electric Technologies was down $0.13 (1.9%) to $6.55 on light volume. Throughout the day, 6,347 shares of American Electric Technologies exchanged hands as compared to its average daily volume of 13,100 shares. The stock ranged in price between $6.51-$6.71 after having opened the day at $6.63 as compared to the previous trading day's close of $6.68.

American Electric Technologies, Inc. provides power delivery solutions to the energy industry in the United States and internationally. American Electric Technologies has a market cap of $54.9 million and is part of the industrial goods sector. Shares are down 33.1% year-to-date as of the close of trading on Tuesday.

TheStreet Ratings rates American Electric Technologies as a buy. The company's strengths can be seen in multiple areas, such as its largely solid financial position with reasonable debt levels by most measures and reasonable valuation levels. We feel these strengths outweigh the fact that the company has had sub par growth in net income.

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 AETI go as follows:

  • AETI's debt-to-equity ratio is very low at 0.02 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 1.20, which illustrates the ability to avoid short-term cash problems.
  • Regardless of the drop in revenue, the company managed to outperform against the industry average of 6.5%. Since the same quarter one year prior, revenues slightly dropped by 0.5%. The declining revenue appears to have seeped down to the company's bottom line, decreasing earnings per share.
  • AMERICAN ELECTRIC TECH INC's earnings per share declined by 15.4% in the most recent quarter compared to the same quarter a year ago. This company has reported somewhat volatile earnings recently. We feel it is likely to report a decline in earnings in the coming year. During the past fiscal year, AMERICAN ELECTRIC TECH INC increased its bottom line by earning $0.48 versus $0.25 in the prior year. For the next year, the market is expecting a contraction of 4.2% in earnings ($0.46 versus $0.48).
  • Reflecting the weaknesses we have cited, including the decline in the company's earnings per share, AETI has underperformed the S&P 500 Index, declining 11.24% from its price level of one year ago. Looking ahead, although the push and pull of the overall market trend could certainly make a critical difference, we do not see any strong reason stemming from the company's fundamentals that would cause a continuation of last year's decline. In fact, the stock is now selling for less than others in its industry in relation to its current earnings.

You can view the full analysis from the report here: American Electric Technologies 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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