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.

Two out of the three major indices are trading lower today with the Dow Jones Industrial Average ( ^DJI) trading up 27 points (0.2%) at 17,393 as of Tuesday, Nov. 4, 2014, 3:25 PM ET. The NYSE advances/declines ratio sits at 1,085 issues advancing vs. 1,951 declining with 143 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 Fuwei Films (Holdings ( FFHL), up 9.9%, Natuzzi SPA ( NTZ), up 4.3%, Key Technology ( KTEC), up 1.7%, Golden ( GLDC), up 3.0% and Mannatech ( MTEX), up 54.1%.

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

Key Technology ( KTEC) is one of the companies that pushed the Consumer Goods sector higher today. Key Technology was up $0.22 (1.7%) to $13.22 on heavy volume. Throughout the day, 12,875 shares of Key Technology exchanged hands as compared to its average daily volume of 4,300 shares. The stock ranged in a price between $12.80-$13.22 after having opened the day at $13.21 as compared to the previous trading day's close of $13.00.

Key Technology, Inc. designs, manufactures, sells, and services process automation systems integrating electro-optical inspection, sorting, and process systems in the United States and internationally. Key Technology has a market cap of $81.9 million and is part of the food & beverage industry. Shares are down 9.3% year-to-date as of the close of trading on Monday. Currently there are no analysts who rate Key Technology a buy, no analysts rate it a sell, and none rate it a hold.

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TheStreet Ratings rates Key Technology as a hold. Among the primary strengths of the company is its solid financial position based on a variety of debt and liquidity measures that we have evaluated. At the same time, however, we also find weaknesses including deteriorating net income, disappointing return on equity and poor profit margins.

Highlights from TheStreet Ratings analysis on KTEC go as follows:

  • KTEC's debt-to-equity ratio is very low at 0.08 and is currently below that of the industry average, implying that there has been very successful management of debt levels. Although the company had a strong debt-to-equity ratio, its quick ratio of 0.89 is somewhat weak and could be cause for future problems.
  • KEY TECHNOLOGY 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 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, KEY TECHNOLOGY INC increased its bottom line by earning $0.66 versus $0.09 in the prior year.
  • The gross profit margin for KEY TECHNOLOGY INC is currently lower than what is desirable, coming in at 31.25%. It has decreased from the same quarter the previous year. Along with this, the net profit margin of -6.46% is significantly below that of the industry average.
  • Net operating cash flow has significantly decreased to $0.38 million or 71.49% 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.

You can view the full analysis from the report here: Key Technology Ratings Report

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At the close, Natuzzi SPA ( NTZ) was up $0.08 (4.3%) to $1.92 on light volume. Throughout the day, 2,069 shares of Natuzzi SPA exchanged hands as compared to its average daily volume of 9,600 shares. The stock ranged in a price between $1.84-$1.92 after having opened the day at $1.84 as compared to the previous trading day's close of $1.84.

Natuzzi S.p.A. designs, manufactures, and markets leather and fabric upholstered furniture worldwide. Natuzzi SPA has a market cap of $102.6 million and is part of the food & beverage industry. Shares are down 29.0% year-to-date as of the close of trading on Monday. Currently there are no analysts who rate Natuzzi SPA a buy, no analysts rate it a sell, and none rate it a hold.

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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, disappointing return on equity, poor profit margins, weak operating cash flow and deteriorating net income.

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.
  • 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.
  • The change in net income from the same quarter one year ago has exceeded that of the Household Durables industry average, but is less than that of the S&P 500. 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.

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.

Fuwei Films (Holdings ( FFHL) was another company that pushed the Consumer Goods sector higher today. Fuwei Films (Holdings was up $0.09 (9.9%) to $1.00 on heavy volume. Throughout the day, 79,199 shares of Fuwei Films (Holdings exchanged hands as compared to its average daily volume of 15,800 shares. The stock ranged in a price between $0.87-$1.13 after having opened the day at $0.92 as compared to the previous trading day's close of $0.91.

Fuwei Films (Holdings) Co., Ltd., through its subsidiary, Fuwei Films (Shandong) Co., Ltd., develops, manufactures, and distributes plastic films using the biaxially- oriented stretch technique in the People's Republic of China. Fuwei Films (Holdings has a market cap of $11.8 million and is part of the food & beverage industry. Shares are down 19.6% year-to-date as of the close of trading on Monday. Currently there are no analysts who rate Fuwei Films (Holdings a buy, no analysts rate it a sell, and none rate it a hold.

TheStreet Ratings rates Fuwei Films (Holdings as a sell. The company's weaknesses can be seen in multiple areas, such as its feeble growth in its earnings per share, unimpressive growth in net income, disappointing return on equity, poor profit margins and generally disappointing historical performance in the stock itself.

Highlights from TheStreet Ratings analysis on FFHL go as follows:

  • FUWEI FILMS HOLDINGS CO's earnings per share declined by 21.7% 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, FUWEI FILMS HOLDINGS CO reported poor results of -$0.74 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 Chemicals industry. The net income has decreased by 23.5% when compared to the same quarter one year ago, dropping from -$3.00 million to -$3.71 million.
  • 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 Chemicals industry and the overall market, FUWEI FILMS HOLDINGS CO's return on equity significantly trails that of both the industry average and the S&P 500.
  • The gross profit margin for FUWEI FILMS HOLDINGS CO is currently extremely low, coming in at 3.71%. It has decreased from the same quarter the previous year. Along with this, the net profit margin of -32.84% is significantly below that of the industry average.
  • Reflecting the weaknesses we have cited, including the decline in the company's earnings per share, FFHL has underperformed the S&P 500 Index, declining 18.49% from its price level of one year ago. 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: Fuwei Films (Holdings 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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