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 0.4% versus the S&P 500, which was down 0.1%. Laggards within the Consumer Goods sector included Crystal Rock Holdings ( CRVP), down 4.1%, BRASILAGRO - CIA Bras de Prop Agricolas ( LND), down 2.3%, Entertainment Gaming Asia ( EGT), down 3.8%, Global-Tech Advanced Innovations ( GAI), down 3.9% and DS Healthcare Group ( DSKX), 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 $0.38 (1.9%) to $19.20 on average volume. Throughout the day, 963,260 shares of Flowers Foods exchanged hands as compared to its average daily volume of 1,057,200 shares. The stock ranged in price between $19.18-$19.65 after having opened the day at $19.58 as compared to the previous trading day's close of $19.58.

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 $4.1 billion and is part of the food & beverage industry. Shares are down 8.8% year-to-date as of the close of trading on Friday. 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 reasonable valuation levels, 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:

  • 47.80% 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 4.79% trails the industry average.
  • The debt-to-equity ratio is somewhat low, currently at 0.74, 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.
  • FLO, with its decline in revenue, slightly underperformed the industry average of 2.7%. Since the same quarter one year prior, revenues slightly dropped by 2.3%. The declining revenue appears to have seeped down to the company's bottom line, decreasing earnings per share.
  • FLOWERS FOODS INC's earnings per share declined by 9.1% 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, FLOWERS FOODS INC increased its bottom line by earning $1.09 versus $0.66 in the prior year. For the next year, the market is expecting a contraction of 13.1% in earnings ($0.95 versus $1.09).

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, DS Healthcare Group ( DSKX) was down $0.06 (3.9%) to $1.37 on average volume. Throughout the day, 13,900 shares of DS Healthcare Group exchanged hands as compared to its average daily volume of 15,600 shares. The stock ranged in price between $1.28-$1.46 after having opened the day at $1.46 as compared to the previous trading day's close of $1.43.

DS Healthcare Group has a market cap of $23.0 million and is part of the food & beverage industry. Shares are down 41.7% year-to-date as of the close of trading on Friday.

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 (3.8%) to $0.50 on light volume. Throughout the day, 5,740 shares of Entertainment Gaming Asia exchanged hands as compared to its average daily volume of 16,000 shares. The stock ranged in price between $0.50-$0.54 after having opened the day at $0.54 as compared to the previous trading day's close of $0.52.

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 $15.7 million and is part of the food & beverage industry. Shares are down 58.1% year-to-date as of the close of trading on Friday.

TheStreet Ratings rates Entertainment Gaming Asia as a sell. The company's weaknesses can be seen in multiple areas, such as its disappointing return on equity and weak operating cash flow.

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Highlights from TheStreet Ratings analysis on EGT go as follows:

  • 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.
  • Net operating cash flow has decreased to $1.82 million or 17.06% when compared to the same quarter last year. In addition, when comparing the cash generation rate to the industry average, the firm's growth is significantly lower.
  • This stock's share value has moved by only 65.58% over the past year. 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.
  • ENTERTAINMENT GAMING ASIA has shown improvement in its earnings for its most recently reported quarter when compared with the same quarter a year earlier. This company has not demonstrated a clear trend in earnings over the past 2 years, making it difficult to accurately predict earnings for the coming year. During the past fiscal year, ENTERTAINMENT GAMING ASIA swung to a loss, reporting -$0.15 versus $0.07 in the prior year.
  • The gross profit margin for ENTERTAINMENT GAMING ASIA is rather high; currently it is at 67.48%. 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 -0.44% significantly underperformed when compared to the industry average.

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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