3 Stocks Pushing The Consumer Goods Sector Lower

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The Consumer Goods sector as a whole closed the day down 1.1% versus the S&P 500, which was down 1.3%. Laggards within the Consumer Goods sector included Bridgford Foods ( BRID), down 5.2%, Willamette Valley Vineyards ( WVVI), down 1.5%, Koss ( KOSS), down 2.6%, Truett-Hurst ( THST), down 3.9% and Standard Register ( SR), down 21.8%.

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

Callaway Golf ( ELY) is one of the companies that pushed the Consumer Goods sector lower today. Callaway Golf was down $0.13 (1.6%) to $7.78 on average volume. Throughout the day, 528,154 shares of Callaway Golf exchanged hands as compared to its average daily volume of 596,300 shares. The stock ranged in price between $7.73-$8.00 after having opened the day at $7.92 as compared to the previous trading day's close of $7.91.

Callaway Golf Company, together with its subsidiaries, designs, manufactures, and sells golf clubs and balls. It offers drivers, fairway woods, hybrids, irons, wedges, and putters. Callaway Golf has a market cap of $620.6 million and is part of the consumer durables industry. Shares are up 2.7% year-to-date as of the close of trading on Tuesday. Currently there are 3 analysts who rate Callaway Golf a buy, no analysts rate it a sell, and 1 rates it a hold.

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TheStreet Ratings rates Callaway Golf as a hold. The company's strengths can be seen in multiple areas, such as its impressive record of earnings per share growth, compelling growth in net income and expanding profit margins. However, as a counter to these strengths, we also find weaknesses including weak operating cash flow and a generally disappointing performance in the stock itself.

Highlights from TheStreet Ratings analysis on ELY go as follows:

  • CALLAWAY GOLF CO reported significant earnings per share improvement in the most recent quarter compared to the same quarter a year ago. The company has demonstrated a pattern of positive earnings per share growth over the past two years. We feel that this trend should continue. This trend suggests that the performance of the business is improving. During the past fiscal year, CALLAWAY GOLF CO continued to lose money by earning -$0.38 versus -$1.97 in the prior year. This year, the market expects an improvement in earnings ($0.18 versus -$0.38).
  • The net income growth from the same quarter one year ago has significantly exceeded that of the S&P 500 and the Leisure Equipment & Products industry. The net income increased by 94.6% when compared to the same quarter one year prior, rising from -$21.15 million to -$1.13 million.
  • 41.84% is the gross profit margin for CALLAWAY GOLF CO 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 -0.67% is in-line with the industry average.
  • ELY has underperformed the S&P 500 Index, declining 10.78% 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.
  • Net operating cash flow has declined marginally to $69.68 million or 6.59% 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: Callaway Golf Ratings Report

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At the close, Standard Register ( SR) was down $0.54 (21.8%) to $1.93 on heavy volume. Throughout the day, 154,498 shares of Standard Register exchanged hands as compared to its average daily volume of 15,300 shares. The stock ranged in price between $1.90-$2.56 after having opened the day at $2.48 as compared to the previous trading day's close of $2.47.

Standard Register has a market cap of $23.0 million and is part of the consumer durables industry. Shares are down 24.3% year-to-date as of the close of trading on Tuesday.

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Truett-Hurst ( THST) was another company that pushed the Consumer Goods sector lower today. Truett-Hurst was down $0.14 (3.9%) to $3.46 on average volume. Throughout the day, 10,322 shares of Truett-Hurst exchanged hands as compared to its average daily volume of 10,400 shares. The stock ranged in price between $3.46-$3.55 after having opened the day at $3.55 as compared to the previous trading day's close of $3.60.

Truett-Hurst, Inc. produces, markets, and sells wines primarily in the United States. The company operates through Wholesale, Direct to Consumer, and Internet segments. Truett-Hurst has a market cap of $13.8 million and is part of the consumer durables industry. Shares are down 9.2% year-to-date as of the close of trading on Tuesday. Currently there are no analysts who rate Truett-Hurst a buy, no analysts rate it a sell, and 1 rates it a hold.

TheStreet Ratings rates Truett-Hurst as a sell. The company's weaknesses can be seen in multiple areas, such as its deteriorating net income, generally high debt management risk, generally disappointing historical performance in the stock itself and feeble growth in its earnings per share.

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Highlights from TheStreet Ratings analysis on THST 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 Beverages industry. The net income has significantly decreased by 203.0% when compared to the same quarter one year ago, falling from -$0.03 million to -$0.10 million.
  • The debt-to-equity ratio of 1.28 is relatively high when compared with the industry average, suggesting a need for better debt level management. Along with this, the company manages to maintain a quick ratio of 0.49, which clearly demonstrates the inability to cover short-term cash needs.
  • Despite any intermediate fluctuations, we have only bad news to report on this stock's performance over the last year: it has tumbled by 28.11%, worse than the S&P 500's performance. Consistent with the plunge in the stock price, the company's earnings per share are down 200.00% compared to the year-earlier quarter. Turning toward the future, the fact that the stock has come down in price over the past year should not necessarily be interpreted as a negative; it could be one of the factors that may help make the stock attractive down the road. Right now, however, we believe that it is too soon to buy.
  • TRUETT-HURST 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. The company has reported a trend of declining earnings per share over the past year. However, the consensus estimate suggests that this trend should reverse in the coming year. During the past fiscal year, TRUETT-HURST INC swung to a loss, reporting -$0.16 versus $0.08 in the prior year. This year, the market expects an improvement in earnings ($0.10 versus -$0.16).
  • Compared to other companies in the Beverages industry and the overall market, TRUETT-HURST INC's return on equity significantly trails that of both the industry average and the S&P 500.

You can view the full analysis from the report here: Truett-Hurst 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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