3 Stocks Pushing The Industrial 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 Industrial Goods sector as a whole closed the day down 1.5% versus the S&P 500, which was down 0.8%. Laggards within the Industrial Goods sector included Art's-Way Manufacturing ( ARTW), down 4.8%, TAT Technologies ( TATT), down 1.8%, Guanwei Recycling ( GPRC), down 9.8%, P & F Industries ( PFIN), down 2.2% and Skyline ( SKY), down 3.3%.

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

Rockwell Automation ( ROK) is one of the companies that pushed the Industrial Goods sector lower today. Rockwell Automation was down $2.13 (1.8%) to $115.00 on average volume. Throughout the day, 761,257 shares of Rockwell Automation exchanged hands as compared to its average daily volume of 615,900 shares. The stock ranged in price between $114.68-$117.00 after having opened the day at $117.00 as compared to the previous trading day's close of $117.13.

Rockwell Automation, Inc. provides industrial automation power, control, and information solutions. It operates in two segments, Architecture & Software and Control Products & Solutions. Rockwell Automation has a market cap of $16.2 billion and is part of the industrial industry. Shares are down 0.9% year-to-date as of the close of trading on Friday. Currently there are 8 analysts who rate Rockwell Automation a buy, 2 analysts rate it a sell, and 4 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 Rockwell Automation 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, expanding profit margins, increase in stock price during the past year 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 ROK go as follows:

  • ROK's revenue growth has slightly outpaced the industry average of 6.5%. Since the same quarter one year prior, revenues slightly increased by 1.6%. 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.
  • The current debt-to-equity ratio, 0.44, is low and is below the industry average, implying that there has been successful management of debt levels. To add to this, ROK has a quick ratio of 1.71, which demonstrates the ability of the company to cover short-term liquidity needs.
  • 43.75% is the gross profit margin for ROCKWELL AUTOMATION which we consider to be strong. It has increased from the same quarter the previous year. Along with this, the net profit margin of 12.10% is above that of the industry average.
  • ROCKWELL AUTOMATION' earnings per share from the most recent quarter came in slightly below the year earlier quarter. 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, ROCKWELL AUTOMATION increased its bottom line by earning $5.36 versus $5.14 in the prior year. This year, the market expects an improvement in earnings ($6.15 versus $5.36).
  • Net operating cash flow has slightly increased to $301.10 million or 2.44% when compared to the same quarter last year. Despite an increase in cash flow, ROCKWELL AUTOMATION's average is still marginally south of the industry average growth rate of 3.11%.

You can view the full analysis from the report here: Rockwell Automation 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, Guanwei Recycling ( GPRC) was down $0.07 (9.8%) to $0.63 on heavy volume. Throughout the day, 138,999 shares of Guanwei Recycling exchanged hands as compared to its average daily volume of 77,500 shares. The stock ranged in price between $0.53-$0.68 after having opened the day at $0.67 as compared to the previous trading day's close of $0.70.

Guanwei Recycling Corp. manufactures and distributes low density polyethylene (LDPE) and other recycled plastics products primarily in the People's Republic of China and internationally. Guanwei Recycling has a market cap of $7.4 million and is part of the industrial industry. Shares are down 75.7% 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.

TheStreet Ratings rates Guanwei Recycling 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, poor profit margins and generally disappointing historical performance in the stock itself.

Highlights from TheStreet Ratings analysis on GPRC go as follows:

  • GUANWEI RECYCLING CORP 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, GUANWEI RECYCLING CORP reported lower earnings of $0.93 versus $1.13 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 Commercial Services & Supplies industry. The net income has significantly decreased by 68.0% when compared to the same quarter one year ago, falling from $2.37 million to $0.76 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. When compared to other companies in the Commercial Services & Supplies industry and the overall market, GUANWEI RECYCLING CORP's return on equity is below that of both the industry average and the S&P 500.
  • The gross profit margin for GUANWEI RECYCLING CORP is rather low; currently it is at 16.86%. It has decreased significantly from the same period last year. Along with this, the net profit margin of 6.41% significantly trails the industry average.
  • Despite any intermediate fluctuations, we have only bad news to report on this stock's performance over the last year: it has tumbled by 56.71%, worse than the S&P 500's performance. Consistent with the plunge in the stock price, the company's earnings per share are down 69.56% compared to the year-earlier quarter. Naturally, the overall market trend is bound to be a significant factor. However, in one sense, the stock's sharp decline last year is a positive for future investors, making it cheaper (in proportion to its earnings over the past year) than most other stocks in its industry. But due to other concerns, we feel the stock is still not a good buy right now.

You can view the full analysis from the report here: Guanwei Recycling 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.

Art's-Way Manufacturing ( ARTW) was another company that pushed the Industrial Goods sector lower today. Art's-Way Manufacturing was down $0.24 (4.8%) to $4.76 on heavy volume. Throughout the day, 14,385 shares of Art's-Way Manufacturing exchanged hands as compared to its average daily volume of 7,400 shares. The stock ranged in price between $4.76-$5.00 after having opened the day at $4.99 as compared to the previous trading day's close of $5.00.

Art's-Way Manufacturing Co., Inc. manufactures and sells agricultural equipment, specialized modular science buildings, pressurized steel vessels, and steel cutting tools in the United States and internationally. Art's-Way Manufacturing has a market cap of $20.4 million and is part of the industrial industry. Shares are down 17.9% year-to-date as of the close of trading on Friday.

TheStreet Ratings rates Art's-Way Manufacturing as a hold. The company's strengths can be seen in multiple areas, such as its revenue growth, good cash flow from operations and largely solid financial position with reasonable debt levels by most measures. However, as a counter to these strengths, we also find weaknesses including a generally disappointing performance in the stock itself, feeble growth in the company's earnings per share and deteriorating 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 ARTW go as follows:

  • ARTW's revenue growth has slightly outpaced the industry average of 4.1%. Since the same quarter one year prior, revenues slightly increased by 2.4%. 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.
  • Net operating cash flow has significantly increased by 53.67% to -$0.62 million when compared to the same quarter last year. In addition, ARTS WAY MFG INC has also vastly surpassed the industry average cash flow growth rate of -24.48%.
  • The debt-to-equity ratio is somewhat low, currently at 0.65, 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 0.43 is very weak and demonstrates a lack of ability to pay short-term obligations.
  • ARTS WAY MFG INC 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 suffered a declining pattern earnings per share over the past two years. During the past fiscal year, ARTS WAY MFG INC reported lower earnings of $0.38 versus $0.66 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 Machinery industry. The net income has significantly decreased by 50.9% when compared to the same quarter one year ago, falling from $0.52 million to $0.25 million.

You can view the full analysis from the report here: Art's-Way 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.

More from Markets

Oil Slumps, Gas Spikes Ahead of Holiday Weekend; Assessing the Chipmakers--ICYMI

Oil Slumps, Gas Spikes Ahead of Holiday Weekend; Assessing the Chipmakers--ICYMI

Week Ahead: Wall Street Looks to Jobs Report as North Korea Meeting Less Certain

Week Ahead: Wall Street Looks to Jobs Report as North Korea Meeting Less Certain

Dow and S&P 500 Decline, Energy Shares Fall as U.S. Crude Oil Slides 4%

Dow and S&P 500 Decline, Energy Shares Fall as U.S. Crude Oil Slides 4%

Replay: Jim Cramer on the Markets, 10-Year Yield, Oil Prices and Foot Locker

Replay: Jim Cramer on the Markets, 10-Year Yield, Oil Prices and Foot Locker

Video: You Could Live in a Ritz-Carlton or St. Regis Home

Video: You Could Live in a Ritz-Carlton or St. Regis Home