3 Stocks Pushing The Conglomerates 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 Conglomerates sector as a whole closed the day down 1.9% versus the S&P 500, which was down 1.6%. Laggards within the Conglomerates sector included Pingtan Marine Enterprise ( PME), down 3.1%, Rare Element Resources ( REE), down 10.4%, MGT Capital Investments ( MGT), down 5.8%, Lipocine ( LPCN), down 10.9% and Infinity Cross Border Acquisition ( INXB), down 5.4%.

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

Global Eagle Entertainment ( ENT) is one of the companies that pushed the Conglomerates sector lower today. Global Eagle Entertainment was down $0.44 (3.6%) to $11.67 on light volume. Throughout the day, 274,121 shares of Global Eagle Entertainment exchanged hands as compared to its average daily volume of 404,900 shares. The stock ranged in price between $11.65-$12.15 after having opened the day at $12.06 as compared to the previous trading day's close of $12.11.

Global Eagle Entertainment Inc., a content and connectivity distribution and services company, provides in-flight video content, e-commerce, and information services for the airline industry worldwide. The company operates through two segments, Connectivity and Content. Global Eagle Entertainment has a market cap of $837.3 million and is part of the media industry. Shares are down 18.6% year-to-date as of the close of trading on Wednesday. Currently there are 4 analysts who rate Global Eagle Entertainment a buy, no analysts rate it a sell, and 1 rates it a hold.

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TheStreet Ratings rates Global Eagle Entertainment as a hold. The company's strengths can be seen in multiple areas, such as its robust revenue growth, largely solid financial position with reasonable debt levels by most measures and solid stock price performance. However, as a counter to these strengths, we find that the company's profit margins have been poor overall.

Highlights from TheStreet Ratings analysis on ENT go as follows:

  • ENT's very impressive revenue growth exceeded the industry average of 43.9%. Since the same quarter one year prior, revenues leaped by 56.2%. Growth in the company's revenue appears to have helped boost the earnings per share.
  • ENT's debt-to-equity ratio is very low at 0.01 and is currently below that of the industry average, implying that there has been very successful management of debt levels. To add to this, ENT has a quick ratio of 1.61, which demonstrates the ability of the company to cover short-term liquidity needs.
  • Net operating cash flow has increased to -$10.04 million or 20.67% when compared to the same quarter last year. Despite an increase in cash flow, GLOBAL EAGLE ENTERTAINMENT's cash flow growth rate is still lower than the industry average growth rate of 41.67%.
  • The return on equity has improved slightly when compared to the same quarter one year prior. This can be construed as a modest strength in the organization. Compared to other companies in the Internet Software & Services industry and the overall market, GLOBAL EAGLE ENTERTAINMENT's return on equity significantly trails that of both the industry average and the S&P 500.
  • The gross profit margin for GLOBAL EAGLE ENTERTAINMENT is currently lower than what is desirable, coming in at 25.37%. Despite the low profit margin, it has increased significantly from the same period last year. Despite the mixed results of the gross profit margin, the net profit margin of 12.22% trails the industry average.

You can view the full analysis from the report here: Global Eagle Entertainment Ratings Report

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At the close, Lipocine ( LPCN) was down $0.79 (10.9%) to $6.44 on heavy volume. Throughout the day, 836,846 shares of Lipocine exchanged hands as compared to its average daily volume of 58,400 shares. The stock ranged in price between $6.25-$7.43 after having opened the day at $6.71 as compared to the previous trading day's close of $7.23.

Lipocine has a market cap of $66.7 million and is part of the media industry. Shares are unchanged year-to-date as of the close of trading on Wednesday. Currently there are 2 analysts who rate Lipocine 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.

Rare Element Resources ( REE) was another company that pushed the Conglomerates sector lower today. Rare Element Resources was down $0.08 (10.4%) to $0.69 on heavy volume. Throughout the day, 531,526 shares of Rare Element Resources exchanged hands as compared to its average daily volume of 154,300 shares. The stock ranged in price between $0.66-$0.77 after having opened the day at $0.76 as compared to the previous trading day's close of $0.77.

Rare Element Resources has a market cap of $40.5 million and is part of the media industry. Shares are down 50.3% year-to-date as of the close of trading on Wednesday. Currently there are no analysts who rate Rare Element Resources 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.

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