3 Stocks Pushing The Aerospace/Defense Industry Lower

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The Aerospace/Defense industry as a whole closed the day down 0.7% versus the S&P 500, which was down 0.3%. Laggards within the Aerospace/Defense industry included Micronet Enertec Technologies ( MICT), down 4.2%, CPI Aerostructures ( CVU), down 3.7%, Astrotech ( ASTC), down 4.1%, Acorn Energy ( ACFN), down 3.7% and LMI Aerospace ( LMIA), down 2.2%.

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

LMI Aerospace ( LMIA) is one of the companies that pushed the Aerospace/Defense industry lower today. LMI Aerospace was down $0.29 (2.2%) to $12.80 on average volume. Throughout the day, 48,795 shares of LMI Aerospace exchanged hands as compared to its average daily volume of 39,700 shares. The stock ranged in price between $12.73-$13.12 after having opened the day at $13.04 as compared to the previous trading day's close of $13.09.

LMI Aerospace Inc. provides structural assemblies, kits and components, and design engineering services to the aerospace and defense markets in the United States. LMI Aerospace has a market cap of $173.0 million and is part of the industrial goods sector. Shares are down 10.0% year-to-date as of the close of trading on Monday. Currently there are no analysts who rate LMI Aerospace a buy, no analysts rate it a sell, and 3 rate it a hold.

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

Highlights from TheStreet Ratings analysis on LMIA 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 Aerospace & Defense industry. The net income has significantly decreased by 258.9% when compared to the same quarter one year ago, falling from $4.66 million to -$7.41 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 Aerospace & Defense industry and the overall market, LMI AEROSPACE INC's return on equity significantly trails that of both the industry average and the S&P 500.
  • The gross profit margin for LMI AEROSPACE INC is rather low; currently it is at 23.21%. It has decreased from the same quarter the previous year. Along with this, the net profit margin of -6.99% is significantly below that of the industry average.
  • The debt-to-equity ratio is very high at 2.10 and currently higher than the industry average, implying increased risk associated with the management of debt levels within the company. Regardless of the company's weak debt-to-equity ratio, LMIA has managed to keep a strong quick ratio of 1.79, which demonstrates the ability to cover short-term cash needs.
  • In its most recent trading session, LMIA has closed at a price level that was not very different from its closing price of one year earlier. This is probably due to its weak earnings growth as well as other mixed factors. The fact that the stock is now selling for less than others in its industry in relation to its current earnings is not reason enough to justify a buy rating at this time.

You can view the full analysis from the report here: LMI Aerospace Ratings Report

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At the close, Acorn Energy ( ACFN) was down $0.06 (3.7%) to $1.55 on light volume. Throughout the day, 115,234 shares of Acorn Energy exchanged hands as compared to its average daily volume of 208,300 shares. The stock ranged in price between $1.55-$1.80 after having opened the day at $1.61 as compared to the previous trading day's close of $1.61.

Acorn Energy, Inc., through its subsidiaries, provides technology driven solutions for energy infrastructure asset management worldwide. It offers oil and gas sensor systems, a fiber optic sensing system for the energy, commercial security, and defense markets. Acorn Energy has a market cap of $35.9 million and is part of the industrial goods sector. Shares are down 60.4% year-to-date as of the close of trading on Monday. Currently there is 1 analyst who rates Acorn Energy a buy, no analysts rate it a sell, and 1 rates it a hold.

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TheStreet Ratings rates Acorn Energy as a sell. The company's weaknesses can be seen in multiple areas, such as its disappointing return on equity, poor profit margins and generally disappointing historical performance in the stock itself.

Highlights from TheStreet Ratings analysis on ACFN 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 Electronic Equipment, Instruments & Components industry and the overall market, ACORN ENERGY INC's return on equity significantly trails that of both the industry average and the S&P 500.
  • The gross profit margin for ACORN ENERGY INC is currently lower than what is desirable, coming in at 29.35%. It has decreased from the same quarter the previous year. Along with this, the net profit margin of -117.02% is significantly below that of the industry average.
  • ACFN's stock share price has done very poorly compared to where it was a year ago: Despite any rallies, the net result is that it is down by 73.88%, which is also worse that the performance of the S&P 500 Index. Investors have so far failed to pay much attention to the earnings improvements the company has managed to achieve over the last 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.
  • ACFN, with its decline in revenue, underperformed when compared the industry average of 5.7%. Since the same quarter one year prior, revenues slightly dropped by 9.7%. The declining revenue has not hurt the company's bottom line, with increasing earnings per share.
  • ACORN ENERGY INC has improved earnings per share by 37.5% in the most recent quarter compared to the same quarter a year ago. 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, ACORN ENERGY INC reported poor results of -$1.60 versus -$0.94 in the prior year. This year, the market expects an improvement in earnings (-$0.68 versus -$1.60).

You can view the full analysis from the report here: Acorn Energy 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.

CPI Aerostructures ( CVU) was another company that pushed the Aerospace/Defense industry lower today. CPI Aerostructures was down $0.38 (3.7%) to $9.85 on heavy volume. Throughout the day, 22,866 shares of CPI Aerostructures exchanged hands as compared to its average daily volume of 13,500 shares. The stock ranged in price between $9.80-$10.16 after having opened the day at $10.12 as compared to the previous trading day's close of $10.23.

CPI Aerostructures, Inc. is engaged in the contract production of structural aircraft parts for fixed wing aircraft and helicopters in the commercial and defense markets. CPI Aerostructures has a market cap of $84.4 million and is part of the industrial goods sector. Shares are down 32.0% year-to-date as of the close of trading on Monday. Currently there are 2 analysts who rate CPI Aerostructures a buy, no analysts rate it a sell, and none rate it a hold.

TheStreet Ratings rates CPI Aerostructures 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, weak operating cash flow and generally disappointing historical performance in the stock itself.

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Highlights from TheStreet Ratings analysis on CVU go as follows:

  • CPI AEROSTRUCTURES 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. Earnings per share have declined over the last two years. We anticipate that this should continue in the coming year. During the past fiscal year, CPI AEROSTRUCTURES INC reported lower earnings of $0.92 versus $1.39 in the prior year. For the next year, the market is expecting a contraction of 15.2% in earnings ($0.78 versus $0.92).
  • 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 Aerospace & Defense industry. The net income has significantly decreased by 1763.4% when compared to the same quarter one year ago, falling from $1.79 million to -$29.69 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 Aerospace & Defense industry and the overall market, CPI AEROSTRUCTURES INC's return on equity significantly trails that of both the industry average and the S&P 500.
  • Net operating cash flow has significantly decreased to -$0.76 million or 166.54% 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 share price of CPI AEROSTRUCTURES INC has not done very well: it is down 16.10% and has underperformed the S&P 500, in part reflecting the company's sharply declining earnings per share when compared to the year-earlier quarter. The fact that the stock is now selling for less than others in its industry in relation to its current earnings is not reason enough to justify a buy rating at this time.

You can view the full analysis from the report here: CPI Aerostructures 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.

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