3 Stocks Pushing The Consumer Durables Industry 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 Consumer Durables industry as a whole closed the day down 0.8% versus the S&P 500, which was down 0.3%. Laggards within the Consumer Durables industry included Natuzzi SPA ( NTZ), down 6.9%, Global-Tech Advanced Innovations ( GAI), down 2.1%, Virco Manufacturing ( VIRC), down 1.9%, Elecsys ( ESYS), down 2.2% and Johnson Outdoors ( JOUT), down 3.9%.

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

Johnson Outdoors ( JOUT) is one of the companies that pushed the Consumer Durables industry lower today. Johnson Outdoors was down $1.05 (3.9%) to $25.90 on average volume. Throughout the day, 19,082 shares of Johnson Outdoors exchanged hands as compared to its average daily volume of 15,900 shares. The stock ranged in price between $25.88-$27.09 after having opened the day at $26.87 as compared to the previous trading day's close of $26.95.

Johnson Outdoors Inc. manufactures and markets seasonal outdoor recreation products used for fishing, diving, paddling, hiking, and camping primarily in the United States, Canada, Europe, and the Pacific Basin. Johnson Outdoors has a market cap of $235.3 million and is part of the consumer goods sector. Shares are down 0.5% year-to-date as of the close of trading on Monday.

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TheStreet Ratings rates Johnson Outdoors 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 and expanding profit margins. We feel these strengths outweigh the fact that the company has had lackluster performance in the stock itself.

Highlights from TheStreet Ratings analysis on JOUT go as follows:

  • Despite its growing revenue, the company underperformed as compared with the industry average of 7.0%. Since the same quarter one year prior, revenues slightly increased by 5.7%. 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.
  • JOUT's debt-to-equity ratio is very low at 0.04 and is currently below that of the industry average, implying that there has been very successful management of debt levels. To add to this, JOUT has a quick ratio of 1.83, which demonstrates the ability of the company to cover short-term liquidity needs.
  • 42.66% is the gross profit margin for JOHNSON OUTDOORS INC which we consider to be strong. Regardless of JOUT's high profit margin, it has managed to decrease from the same period last year. Despite the mixed results of the gross profit margin, the net profit margin of 3.42% trails the industry average.
  • JOHNSON OUTDOORS 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. This company has reported somewhat volatile earnings recently. We feel it is likely to report a decline in earnings in the coming year. During the past fiscal year, JOHNSON OUTDOORS INC increased its bottom line by earning $1.94 versus $1.08 in the prior year. For the next year, the market is expecting a contraction of 2.6% in earnings ($1.89 versus $1.94).
  • 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 Leisure Equipment & Products industry. The net income has significantly decreased by 65.6% when compared to the same quarter one year ago, falling from $13.65 million to $4.70 million.

You can view the full analysis from the report here: Johnson Outdoors Ratings Report

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At the close, Virco Manufacturing ( VIRC) was down $0.05 (1.9%) to $2.61 on light volume. Throughout the day, 13,518 shares of Virco Manufacturing exchanged hands as compared to its average daily volume of 19,000 shares. The stock ranged in price between $2.56-$2.64 after having opened the day at $2.61 as compared to the previous trading day's close of $2.66.

Virco Mfg. Corporation is engaged in the design, production, and distribution of furniture for the commercial and education markets in the United States. Virco Manufacturing has a market cap of $39.5 million and is part of the consumer goods sector. Shares are up 15.9% year-to-date as of the close of trading on Monday. Currently there are no analysts who rate Virco Manufacturing a buy, no analysts rate it a sell, and 1 rates it a hold.

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TheStreet Ratings rates Virco Manufacturing as a hold. The company's strengths can be seen in multiple areas, such as its solid stock price performance, expanding profit margins and notable return on equity. However, as a counter to these strengths, we also find weaknesses including unimpressive growth in net income, weak operating cash flow and generally higher debt management risk.

Highlights from TheStreet Ratings analysis on VIRC go as follows:

  • Compared to its closing price of one year ago, VIRC's share price has jumped by 28.29%, exceeding the performance of the broader market during that same time frame. Regarding the stock's future course, our hold rating indicates that we do not recommend additional investment in this stock despite its gains in the past year.
  • 41.25% is the gross profit margin for VIRCO MFG. CORP which we consider to be strong. It has increased from the same quarter the previous year. Regardless of the strong results of the gross profit margin, the net profit margin of 9.78% trails the industry average.
  • VIRCO MFG. CORP's earnings per share declined by 16.7% 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, VIRCO MFG. CORP continued to lose money by earning -$0.13 versus -$0.27 in the prior year. This year, the market expects an improvement in earnings ($0.07 versus -$0.13).
  • 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 Commercial Services & Supplies industry average. The net income has decreased by 16.2% when compared to the same quarter one year ago, dropping from $6.21 million to $5.20 million.
  • Net operating cash flow has significantly decreased to -$11.93 million or 60.95% 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: Virco Manufacturing Ratings Report

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Natuzzi SPA ( NTZ) was another company that pushed the Consumer Durables industry lower today. Natuzzi SPA was down $0.15 (6.9%) to $2.03 on light volume. Throughout the day, 2,591 shares of Natuzzi SPA exchanged hands as compared to its average daily volume of 13,200 shares. The stock ranged in price between $2.03-$2.12 after having opened the day at $2.12 as compared to the previous trading day's close of $2.18.

Natuzzi S.p.A. designs, manufactures, and markets leather and fabric upholstered furniture worldwide. Natuzzi SPA has a market cap of $114.1 million and is part of the consumer goods sector. Shares are down 15.8% year-to-date as of the close of trading on Monday.

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.

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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.

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