3 Food & Beverage Stocks Driving 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.

Two out of the three major indices are trading lower today with the Dow Jones Industrial Average ( ^DJI) trading down 25.94 points (-0.2%) at 17,111 as of Monday, Sept. 8, 2014, 4:20 PM ET. The NYSE advances/declines ratio sits at 1,156 issues advancing vs. 1,888 declining with 146 unchanged.

The Food & Beverage industry as a whole closed the day down 0.1% versus the S&P 500, which was down 0.3%. Top gainers within the Food & Beverage industry included Agria ( GRO), up 11.2%, Leading Brands ( LBIX), up 3.1%, Pingtan Marine Enterprise ( PME), up 3.2%, Origin Agritech ( SEED), up 2.4% and Synutra International ( SYUT), up 5.0%.

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

Origin Agritech ( SEED) is one of the companies that pushed the Food & Beverage industry higher today. Origin Agritech was up $0.05 (2.4%) to $2.10 on heavy volume. Throughout the day, 184,038 shares of Origin Agritech exchanged hands as compared to its average daily volume of 82,400 shares. The stock ranged in a price between $2.02-$2.18 after having opened the day at $2.02 as compared to the previous trading day's close of $2.05.

Origin Agritech Limited, an agricultural biotechnology company, is engaged in crop seed breeding and genetic improvement activities in the People's Republic of China. Origin Agritech has a market cap of $46.4 million and is part of the consumer goods sector. Shares are up 61.4% year-to-date as of the close of trading on Friday. Currently there are no analysts who rate Origin Agritech a buy, no analysts rate it a sell, and none rate it a hold.

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TheStreet Ratings rates Origin Agritech as a sell. The company's weaknesses can be seen in multiple areas, such as its deteriorating net income, generally high debt management risk, disappointing return on equity and poor profit margins.

Highlights from TheStreet Ratings analysis on SEED go as follows:

  • 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 365.6% when compared to the same quarter one year ago, falling from $0.90 million to -$2.39 million.
  • Currently the debt-to-equity ratio of 2.00 is quite high overall and when compared to the industry average, suggesting that the current management of debt levels should be re-evaluated. Along with this, the company manages to maintain a quick ratio of 0.10, which clearly demonstrates the inability to cover short-term cash needs.
  • 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 Food Products industry and the overall market, ORIGIN AGRITECH LTD's return on equity significantly trails that of both the industry average and the S&P 500.
  • The gross profit margin for ORIGIN AGRITECH LTD is rather low; currently it is at 22.88%. It has decreased from the same quarter the previous year. Along with this, the net profit margin of -15.94% is significantly below that of the industry average.
  • The revenue fell significantly faster than the industry average of 3.1%. Since the same quarter one year prior, revenues fell by 28.6%. 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: Origin Agritech 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, Leading Brands ( LBIX) was up $0.12 (3.1%) to $3.99 on average volume. Throughout the day, 21,208 shares of Leading Brands exchanged hands as compared to its average daily volume of 14,300 shares. The stock ranged in a price between $3.99-$4.08 after having opened the day at $4.00 as compared to the previous trading day's close of $3.87.

Leading Brands, Inc., together with its subsidiaries, is engaged in the development, production, marketing, and distribution of beverages in Canada, the western United States, and Asia. Leading Brands has a market cap of $11.7 million and is part of the consumer goods sector. Shares are up 4.1% year-to-date as of the close of trading on Friday. Currently there are no analysts who rate Leading Brands 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 Leading Brands as a hold. 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 expanding profit margins. However, as a counter to these strengths, we also find weaknesses including a generally disappointing performance in the stock itself, deteriorating net income and disappointing return on equity.

Highlights from TheStreet Ratings analysis on LBIX go as follows:

  • LBIX's debt-to-equity ratio is very low at 0.00 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 1.26, which illustrates the ability to avoid short-term cash problems.
  • 44.03% is the gross profit margin for LEADING BRANDS INC which we consider to be strong. Regardless of LBIX's high profit margin, it has managed to decrease from the same period last year. Despite the mixed results of the gross profit margin, LBIX's net profit margin of 4.74% is significantly lower than the industry average.
  • Net operating cash flow has significantly decreased to -$0.38 million or 132.18% when compared to the same quarter last year. In addition, when comparing to the industry average, the firm's growth rate is much lower.
  • The company's current return on equity has slightly decreased from the same quarter one year prior. This implies a minor weakness in the organization. In comparison to the other companies in the Beverages industry and the overall market, LEADING BRANDS INC's return on equity is significantly below that of the industry average and is below that of the S&P 500.

You can view the full analysis from the report here: Leading Brands 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.

Agria ( GRO) was another company that pushed the Food & Beverage industry higher today. Agria was up $0.14 (11.2%) to $1.39 on heavy volume. Throughout the day, 234,242 shares of Agria exchanged hands as compared to its average daily volume of 41,900 shares. The stock ranged in a price between $1.25-$1.39 after having opened the day at $1.28 as compared to the previous trading day's close of $1.25.

Agria has a market cap of $68.7 million and is part of the consumer goods sector. Shares are down 15.0% year-to-date as of the close of trading on Friday.

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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