3 Consumer Goods Stocks Nudging The Sector 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 41.93 points (-0.2%) at 17,071 as of Monday, Sept. 29, 2014, 4:20 PM ET. The NYSE advances/declines ratio sits at 1,274 issues advancing vs. 1,814 declining with 136 unchanged.

The Consumer Goods sector as a whole closed the day down 0.3% versus the S&P 500, which was down 0.3%. Top gainers within the Consumer Goods sector included China Shengda Packaging Group ( CPGI), up 2.2%, Entertainment Gaming Asia ( EGT), up 23.1%, Natuzzi SPA ( NTZ), up 4.8%, Koss ( KOSS), up 5.0% and Gaming Partners International ( GPIC), up 2.6%.

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

Natuzzi SPA ( NTZ) is one of the companies that pushed the Consumer Goods sector higher today. Natuzzi SPA was up $0.10 (4.8%) to $2.18 on light volume. Throughout the day, 400 shares of Natuzzi SPA exchanged hands as compared to its average daily volume of 13,400 shares. The stock ranged in a price between $2.09-$2.18 after having opened the day at $2.09 as compared to the previous trading day's close of $2.08.

Natuzzi S.p.A. designs, manufactures, and markets leather and fabric upholstered furniture worldwide. Natuzzi SPA has a market cap of $114.6 million and is part of the food & beverage industry. Shares are down 19.7% year-to-date as of the close of trading on Friday. 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, poor profit margins and weak operating cash flow.

Highlights from TheStreet Ratings analysis on NTZ go as follows:

  • NATUZZI SPA's earnings per share declined by 8.8% in the most recent quarter compared to 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 underperformed when compared to that of the S&P 500 and greatly underperformed compared to the Household Durables industry average. The net income has decreased by 7.8% when compared to the same quarter one year ago, dropping from -$18.59 million to -$20.04 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 27.58%. It has decreased from the same quarter the previous year. Along with this, the net profit margin of -13.06% is significantly below that of the industry average.
  • Net operating cash flow has significantly decreased to -$5.04 million or 843.06% when compared to the same quarter last year. In addition, when comparing to the industry average, the firm's growth rate is much lower.

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.

At the close, Entertainment Gaming Asia ( EGT) was up $0.12 (23.1%) to $0.64 on heavy volume. Throughout the day, 227,087 shares of Entertainment Gaming Asia exchanged hands as compared to its average daily volume of 26,100 shares. The stock ranged in a price between $0.52-$0.65 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 $16.0 million and is part of the food & beverage industry. Shares are down 57.3% year-to-date as of the close of trading on Friday. Currently there are no analysts who rate Entertainment Gaming Asia 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 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 56.92% 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.

China Shengda Packaging Group ( CPGI) was another company that pushed the Consumer Goods sector higher today. China Shengda Packaging Group was up $0.02 (2.2%) to $0.92 on light volume. Throughout the day, 2,600 shares of China Shengda Packaging Group exchanged hands as compared to its average daily volume of 10,400 shares. The stock ranged in a price between $0.90-$0.93 after having opened the day at $0.90 as compared to the previous trading day's close of $0.90.

China Shengda Packaging Group Inc., a paper packaging company, designs, manufactures, and sells flexo-printed and color-printed corrugated paper cartons of various sizes and strengths primarily in the People's Republic of China. China Shengda Packaging Group has a market cap of $36.1 million and is part of the food & beverage industry. Shares are up 9.4% year-to-date as of the close of trading on Friday. Currently there are no analysts who rate China Shengda Packaging Group a buy, no analysts rate it a sell, and none rate it a hold.

TheStreet Ratings rates China Shengda Packaging Group as a hold. 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 and good cash flow from operations. However, as a counter to these strengths, we also find weaknesses including a generally disappointing performance in the stock itself, disappointing return on equity and poor profit margins.

Highlights from TheStreet Ratings analysis on CPGI go as follows:

  • CPGI's revenue growth has slightly outpaced the industry average of 9.2%. Since the same quarter one year prior, revenues rose by 11.2%. This growth in revenue appears to have trickled down to the company's bottom line, improving the earnings per share.
  • CPGI's debt-to-equity ratio is very low at 0.23 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 1.25, which illustrates the ability to avoid short-term cash problems.
  • CHINA SHENGDA PACKAGING GP reported significant earnings per share improvement in the most recent quarter compared to the same quarter a year ago. 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, CHINA SHENGDA PACKAGING GP reported lower earnings of $0.06 versus $0.14 in the prior year.
  • CPGI has underperformed the S&P 500 Index, declining 10.58% from its price level of one year ago. Looking ahead, other than the push or pull of the broad market, we do not see anything in the company's numbers that may help reverse the decline experienced over the past 12 months. Despite the past decline, the stock is still selling for more than most others in its industry.
  • 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. Compared to other companies in the Containers & Packaging industry and the overall market, CHINA SHENGDA PACKAGING GP's return on equity significantly trails that of both the industry average and the S&P 500.

You can view the full analysis from the report here: China Shengda Packaging Group 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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