3 Consumer Durables Stocks Pushing The Industry Higher

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.

All three major indices are trading down today with the Dow Jones Industrial Average ( ^DJI) trading down 8.70 points (-0.1%) at 17,070 as of Thursday, Sept. 4, 2014, 4:20 PM ET. The NYSE advances/declines ratio sits at 1,021 issues advancing vs. 2,057 declining with 126 unchanged.

The Consumer Durables industry as a whole closed the day up 0.7% versus the S&P 500, which was down 0.2%. Top gainers within the Consumer Durables industry included Entertainment Gaming Asia ( EGT), up 3.3%, Natuzzi SPA ( NTZ), up 2.6%, Virco Manufacturing ( VIRC), up 4.4%, Kewaunee Scientific ( KEQU), up 1.6% and Nova Lifestyle ( NVFY), up 8.4%.

TheStreet Ratings Group would like to highlight 3 stocks pushing the industry higher today:

Virco Manufacturing ( VIRC) is one of the companies that pushed the Consumer Durables industry higher today. Virco Manufacturing was up $0.11 (4.4%) to $2.63 on light volume. Throughout the day, 11,815 shares of Virco Manufacturing exchanged hands as compared to its average daily volume of 20,500 shares. The stock ranged in a price between $2.52-$2.63 after having opened the day at $2.54 as compared to the previous trading day's close of $2.52.

Virco Mfg. Corporation is engaged in the design, production, and distribution of furniture for the commercial and education markets in the United States. Virco Manufacturing has a market cap of $39.6 million and is part of the consumer goods sector. Shares are up 9.8% year-to-date as of the close of trading on Wednesday. Currently there are no analysts who rate Virco Manufacturing a buy, no analysts rate it a sell, and 1 rates it a hold.

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 Virco Manufacturing as a hold. The company's strengths can be seen in multiple areas, such as its revenue growth, increase in stock price during the past year and impressive record of earnings per share growth. However, as a counter to these strengths, we find that the growth in the company's net income has been quite unimpressive.

Highlights from TheStreet Ratings analysis on VIRC go as follows:

  • The revenue growth came in higher than the industry average of 4.1%. Since the same quarter one year prior, revenues rose by 18.3%. This growth in revenue appears to have trickled down to the company's bottom line, improving the earnings per share.
  • The stock has risen over the past year as investors have generally rewarded the company for its earnings growth and other positive factors like the ones we have cited in this report. Despite the fact that it has already risen in the past year, there is currently no conclusive evidence that warrants the purchase or sale of this stock.
  • The debt-to-equity ratio is somewhat low, currently at 0.85, and is less than that of the industry average, implying that there has been a relatively successful effort in the management of debt levels. Even though the company has a strong debt-to-equity ratio, the quick ratio of 0.27 is very weak and demonstrates a lack of ability to pay short-term obligations.
  • The company's current return on equity greatly increased when compared to its ROE from the same quarter one year prior. This is a signal of significant strength within the corporation. Compared to other companies in the Commercial Services & Supplies industry and the overall market, VIRCO MFG. CORP's return on equity significantly trails that of both the industry average and the S&P 500.
  • The company, on the basis of net income growth from the same quarter one year ago, has significantly underperformed compared to the Commercial Services & Supplies industry average, but is greater than that of the S&P 500. The net income increased by 13.3% when compared to the same quarter one year prior, going from -$4.45 million to -$3.86 million.

You can view the full analysis from the report here: Virco Manufacturing 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, Natuzzi SPA ( NTZ) was up $0.06 (2.6%) to $2.37 on average volume. Throughout the day, 14,360 shares of Natuzzi SPA exchanged hands as compared to its average daily volume of 14,000 shares. The stock ranged in a price between $2.27-$2.43 after having opened the day at $2.29 as compared to the previous trading day's close of $2.31.

Natuzzi S.p.A. designs, manufactures, and markets leather and fabric upholstered furniture worldwide. Natuzzi SPA has a market cap of $123.4 million and is part of the consumer goods sector. Shares are down 10.8% year-to-date as of the close of trading on Wednesday. Currently there are no analysts who rate Natuzzi SPA a buy, no analysts rate it a sell, and none rate it a hold.

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 Natuzzi SPA as a sell. The company's weaknesses can be seen in multiple areas, such as its feeble growth in its earnings per share, deteriorating net income, disappointing return on equity and poor profit margins.

Highlights from TheStreet Ratings analysis on NTZ go as follows:

  • NATUZZI SPA 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, NATUZZI SPA reported poor results of -$1.71 versus -$0.63 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 Household Durables industry. The net income has significantly decreased by 75.6% when compared to the same quarter one year ago, falling from -$7.69 million to -$13.50 million.
  • 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 Household Durables industry and the overall market, NATUZZI SPA's return on equity significantly trails that of both the industry average and the S&P 500.
  • The gross profit margin for NATUZZI SPA is currently lower than what is desirable, coming in at 31.00%. Regardless of NTZ's low profit margin, it has managed to increase from the same period last year. Despite the mixed results of the gross profit margin, NTZ's net profit margin of -9.95% significantly underperformed when compared to the industry average.
  • Regardless of the drop in revenue, the company managed to outperform against the industry average of 5.5%. Since the same quarter one year prior, revenues slightly dropped by 4.4%. Weakness in the company's revenue seems to have hurt the bottom line, decreasing earnings per share.

You can view the full analysis from the report here: Natuzzi SPA 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 Durables industry higher today. Entertainment Gaming Asia was up $0.02 (3.3%) to $0.48 on average volume. Throughout the day, 14,711 shares of Entertainment Gaming Asia exchanged hands as compared to its average daily volume of 16,900 shares. The stock ranged in a price between $0.48-$0.52 after having opened the day at $0.50 as compared to the previous trading day's close of $0.46.

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 $15.1 million and is part of the consumer goods sector. Shares are down 59.7% year-to-date as of the close of trading on Wednesday. Currently there are no analysts who rate Entertainment Gaming Asia a buy, no analysts rate it a sell, and none rate it a hold.

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.

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.

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.

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