3 Stocks Advancing The Consumer Goods Sector

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 traded up today The three major indices are trading lower today with the Dow Jones Industrial Average ( ^DJI) trading up 18 points (0.1%) at 17,652 as of Monday, Nov. 17, 2014, 3:25 PM ET. The NYSE advances/declines ratio sits at 1,424 issues advancing vs. 1,602 declining with 148 unchanged.

The Consumer Goods sector as a whole closed the day down 0.3% versus the S&P 500, which was up 0.1%. Top gainers within the Consumer Goods sector included Virco Manufacturing ( VIRC), up 4.7%, DS Healthcare Group ( DSKX), up 6.0%, Key Technology ( KTEC), up 3.2%, Acme United ( ACU), up 1.9% and Sypris Solutions ( SYPR), up 1.8%.

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 $0.40 (3.2%) to $13.00 on light volume. Throughout the day, 625 shares of Key Technology exchanged hands as compared to its average daily volume of 4,200 shares. The stock ranged in a price between $12.76-$13.00 after having opened the day at $12.76 as compared to the previous trading day's close of $12.60.

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 12.1% year-to-date as of the close of trading on Friday. 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.
  • KTEC, with its decline in revenue, underperformed when compared the industry average of 2.4%. Since the same quarter one year prior, revenues fell by 20.6%. Weakness in the company's revenue seems to have hurt the bottom line, decreasing earnings per share.
  • 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 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, KEY TECHNOLOGY INC increased its bottom line by earning $0.66 versus $0.09 in the prior year. For the next year, the market is expecting a contraction of 77.3% in earnings ($0.15 versus $0.66).
  • 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, DS Healthcare Group ( DSKX) was up $0.05 (6.0%) to $0.81 on heavy volume. Throughout the day, 56,272 shares of DS Healthcare Group exchanged hands as compared to its average daily volume of 26,900 shares. The stock ranged in a price between $0.71-$0.83 after having opened the day at $0.80 as compared to the previous trading day's close of $0.76.

DS Healthcare Group has a market cap of $11.4 million and is part of the food & beverage industry. Shares are down 71.0% year-to-date as of the close of trading on Friday.

STOCKS TO BUY: TheStreet Quant Ratings has identified a handful of stocks that can potentially TRIPLE in the next 12 months. Learn more.

Virco Manufacturing ( VIRC) was another company that pushed the Consumer Goods sector higher today. Virco Manufacturing was up $0.12 (4.7%) to $2.68 on light volume. Throughout the day, 4,107 shares of Virco Manufacturing exchanged hands as compared to its average daily volume of 5,800 shares. The stock ranged in a price between $2.56-$2.80 after having opened the day at $2.56 as compared to the previous trading day's close of $2.56.

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 $35.3 million and is part of the food & beverage industry. Shares are up 11.6% year-to-date as of the close of trading on Friday. Currently there are no analysts who rate Virco Manufacturing a buy, no analysts rate it a sell, and 1 rates it a hold.

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

Highlights from TheStreet Ratings analysis on VIRC go as follows:

  • 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. Along with this, the net profit margin of 9.78% is above that of the industry average.
  • Compared to where it was a year ago today, the stock is now trading at a higher level, regardless of the company's weak earnings results. Despite the fact that it has already risen in the past year, there is currently no conclusive evidence that warrants the purchase or sale of this stock.
  • The change in net income from the same quarter one year ago has exceeded that of the Commercial Services & Supplies industry average, but is less than that of the S&P 500. 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

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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