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 0.1%. Laggards within the Consumer Goods sector included Entertainment Gaming Asia ( EGT), down 3.7%, Forward Industries ( FORD), down 2.4%, Koss ( KOSS), down 5.0%, Truett-Hurst Inc Class A ( THST), down 3.6% and Willamette Valley Vineyards ( WVVI), down 2.3%.

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

China XD Plastics ( CXDC) is one of the companies that pushed the Consumer Goods sector lower today. China XD Plastics was down $0.34 (4.5%) to $7.22 on light volume. Throughout the day, 274,557 shares of China XD Plastics exchanged hands as compared to its average daily volume of 593,300 shares. The stock ranged in price between $7.14-$7.82 after having opened the day at $7.52 as compared to the previous trading day's close of $7.56.

China XD Plastics Company Limited, a specialty chemical company, through its subsidiaries, is engaged in the research, development, manufacture, and sale of modified and engineering plastics product. China XD Plastics has a market cap of $339.7 million and is part of the consumer non-durables industry. Shares are up 43.7% year-to-date as of the close of trading on Monday.

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TheStreet Ratings rates China XD Plastics as a buy. The company's strengths can be seen in multiple areas, such as its robust revenue growth, solid stock price performance, notable return on equity, attractive valuation levels and good cash flow from operations. We feel these strengths outweigh the fact that the company has had sub par growth in net income.

Highlights from TheStreet Ratings analysis on CXDC go as follows:

  • The revenue growth came in higher than the industry average of 9.0%. Since the same quarter one year prior, revenues rose by 30.7%. 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.
  • Compared to its closing price of one year ago, CXDC's share price has jumped by 50.22%, exceeding the performance of the broader market during that same time frame. Regarding the stock's future course, although almost any stock can fall in a broad market decline, CXDC should continue to move higher despite the fact that it has already enjoyed a very nice gain in the past year.
  • Current return on equity exceeded its ROE from the same quarter one year prior. This is a clear sign of strength within the company. When compared to other companies in the Auto Components industry and the overall market, CHINA XD PLASTICS CO LTD's return on equity exceeds that of the industry average and significantly exceeds that of the S&P 500.
  • Net operating cash flow has significantly increased by 217.44% to $35.12 million when compared to the same quarter last year. In addition, CHINA XD PLASTICS CO LTD has also vastly surpassed the industry average cash flow growth rate of -23.23%.

You can view the full analysis from the report here: China XD Plastics Ratings Report

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At the close, Truett-Hurst Inc Class A ( THST) was down $0.16 (3.6%) to $4.25 on light volume. Throughout the day, 1,868 shares of Truett-Hurst Inc Class A exchanged hands as compared to its average daily volume of 7,400 shares. The stock ranged in price between $4.25-$4.35 after having opened the day at $4.35 as compared to the previous trading day's close of $4.41.

Truett-Hurst, Inc. produces, markets, and sells wines primarily in the United States and Canada. It produces a range of varietals of wine products, including Pinot Noir, Chardonnay, Sauvignon Blanc, Merlot, Cabernet Sauvignon, and Zinfandel. Truett-Hurst Inc Class A has a market cap of $15.8 million and is part of the consumer non-durables industry. Shares are up 5.8% year-to-date as of the close of trading on Monday. Currently there is 1 analyst who rates Truett-Hurst Inc Class A a buy, no analysts rate it a sell, and none rate it a hold.

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TheStreet Ratings rates Truett-Hurst Inc Class A as a sell. Among the areas we feel are negative, one of the most important has been very high debt management risk by most measures.

Highlights from TheStreet Ratings analysis on THST go as follows:

  • The debt-to-equity ratio of 1.05 is relatively high when compared with the industry average, suggesting a need for better debt level management. Along with the unfavorable debt-to-equity ratio, THST maintains a poor quick ratio of 0.74, which illustrates the inability to avoid short-term cash problems.
  • 36.61% is the gross profit margin for TRUETT-HURST INC which we consider to be strong. Regardless of THST's high profit margin, it has managed to decrease from the same period last year. Despite the mixed results of the gross profit margin, THST's net profit margin of -3.56% significantly underperformed when compared to the industry average.
  • Compared to other companies in the Beverages industry and the overall market, TRUETT-HURST INC's return on equity significantly trails that of both the industry average and the S&P 500.
  • THST has underperformed the S&P 500 Index, declining 18.74% from its price level of one year ago.
  • TRUETT-HURST INC has improved earnings per share by 40.0% in the most recent quarter compared to the same quarter a year ago.

You can view the full analysis from the report here: Truett-Hurst Inc Class A 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 $0.02 (3.7%) to $0.52 on heavy volume. Throughout the day, 62,800 shares of Entertainment Gaming Asia exchanged hands as compared to its average daily volume of 14,600 shares. The stock ranged in price between $0.45-$0.53 after having opened the day at $0.52 as compared to the previous trading day's close of $0.54.

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 $16.6 million and is part of the consumer non-durables industry. Shares are down 55.6% 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.

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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 56.00%, 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 5.6%. 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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