3 Stocks Driving The Industrial Goods 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.

One out of the three major indices traded up today 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 down 3.30 points (0.0%) at 17,812 as of Wednesday, Nov. 26, 2014, 3:25 PM ET. The NYSE advances/declines ratio sits at 1,757 issues advancing vs. 1,268 declining with 146 unchanged.

The Industrial Goods sector as a whole closed the day down 0.4% versus the S&P 500, which was up 0.1%. Top gainers within the Industrial Goods sector included Tel Instrument Electronics ( TIK), up 4.6%, TAT Technologies ( TATT), up 3.6%, Gencor Industries ( GENC), up 1.8%, Active Power ( ACPW), up 2.0% and LiqTech International ( LIQT), up 5.6%.

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

LiqTech International ( LIQT) is one of the companies that pushed the Industrial Goods sector higher today. LiqTech International was up $0.07 (5.6%) to $1.34 on average volume. Throughout the day, 188,832 shares of LiqTech International exchanged hands as compared to its average daily volume of 131,200 shares. The stock ranged in a price between $1.25-$1.35 after having opened the day at $1.28 as compared to the previous trading day's close of $1.27.

LiqTech International has a market cap of $50.3 million and is part of the retail industry. Shares are down 43.6% year-to-date as of the close of trading on Tuesday.

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At the close, Active Power ( ACPW) was up $0.04 (2.0%) to $1.96 on light volume. Throughout the day, 40,852 shares of Active Power exchanged hands as compared to its average daily volume of 77,900 shares. The stock ranged in a price between $1.91-$2.00 after having opened the day at $1.91 as compared to the previous trading day's close of $1.92.

Active Power, Inc., together with its subsidiaries, designs, manufactures, and sells flywheel-based uninterruptible power supply (UPS) products and modular infrastructure solutions. Active Power has a market cap of $44.6 million and is part of the retail industry. Shares are down 43.0% year-to-date as of the close of trading on Tuesday. Currently there is 1 analyst who rates Active Power a buy, no analysts rate it a sell, and none rate it a hold.

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TheStreet Ratings rates Active Power as a sell. The company's weaknesses can be seen in multiple areas, such as its disappointing return on equity, weak operating cash flow, poor profit margins, generally disappointing historical performance in the stock itself and feeble growth in its earnings per share.

Highlights from TheStreet Ratings analysis on ACPW 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 Electrical Equipment industry and the overall market, ACTIVE POWER 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 -$2.21 million or 295.51% 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 gross profit margin for ACTIVE POWER INC is currently lower than what is desirable, coming in at 32.00%. Regardless of ACPW's low profit margin, it has managed to increase from the same period last year. Despite the mixed results of the gross profit margin, ACPW's net profit margin of -19.66% significantly underperformed when compared to the industry average.
  • ACPW'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 36.99%, 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.
  • ACTIVE POWER INC has improved earnings per share by 31.3% in the most recent quarter compared to 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, ACTIVE POWER INC reported poor results of -$0.42 versus -$0.07 in the prior year. For the next year, the market is expecting a contraction of 39.3% in earnings (-$0.59 versus -$0.42).

You can view the full analysis from the report here: Active Power 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.

Gencor Industries ( GENC) was another company that pushed the Industrial Goods sector higher today. Gencor Industries was up $0.18 (1.8%) to $9.96 on heavy volume. Throughout the day, 11,225 shares of Gencor Industries exchanged hands as compared to its average daily volume of 7,200 shares. The stock ranged in a price between $9.72-$10.00 after having opened the day at $9.87 as compared to the previous trading day's close of $9.78.

Gencor Industries, Inc., together with its subsidiaries, designs, manufactures, and sells heavy machinery used in the production of highway construction materials, synthetic fuels, and environmental control equipment. Gencor Industries has a market cap of $77.9 million and is part of the retail industry. Shares are up 2.0% year-to-date as of the close of trading on Tuesday. Currently there are no analysts who rate Gencor Industries a buy, no analysts rate it a sell, and none rate it a hold.

TheStreet Ratings rates Gencor Industries as a buy. The company's strengths can be seen in multiple areas, such as its largely solid financial position with reasonable debt levels by most measures, good cash flow from operations, increase in stock price during the past year and notable return on equity. We feel these strengths outweigh the fact that the company has had sub par growth in net income.

Highlights from TheStreet Ratings analysis on GENC go as follows:

  • GENC has no debt to speak of therefore resulting in a debt-to-equity ratio of zero, which we consider to be a relatively favorable sign. Along with this, the company maintains a quick ratio of 27.35, which clearly demonstrates the ability to cover short-term cash needs.
  • Net operating cash flow has increased to $3.40 million or 32.81% when compared to the same quarter last year. In addition, GENCOR INDUSTRIES INC has also vastly surpassed the industry average cash flow growth rate of -21.77%.
  • Compared to where it was 12 months ago, the stock is up, but it has so far lagged the appreciation in the S&P 500. Turning our attention to the future direction of the stock, it goes without saying that even the best stocks can fall in an overall down market. However, in any other environment, this stock still has good upside potential despite the fact that it has already risen in the past year.
  • The revenue fell significantly faster than the industry average of 2.5%. Since the same quarter one year prior, revenues fell by 43.6%. The declining revenue appears to have seeped down to the company's bottom line, decreasing earnings per share.
  • The return on equity has improved slightly when compared to the same quarter one year prior. This can be construed as a modest strength in the organization. In comparison to the other companies in the Machinery industry and the overall market, GENCOR INDUSTRIES INC's return on equity is significantly below that of the industry average and is below that of the S&P 500.

You can view the full analysis from the report here: Gencor Industries 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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