3 Stocks Pushing The Industrial 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 Industrial industry as a whole closed the day down 1.5% versus the S&P 500, which was down 1.3%. Laggards within the Industrial industry included Asia Pacific Wire & Cable ( APWC), down 2.0%, LGL Group ( LGL), down 8.2%, Servotronics ( SVT), down 1.7%, P & F Industries ( PFIN), down 1.6% and American Electric Technologies ( AETI), down 5.2%.

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

Royal Philips ( PHG) is one of the companies that pushed the Industrial industry lower today. Royal Philips was down $0.62 (2.2%) to $27.59 on average volume. Throughout the day, 1,189,514 shares of Royal Philips exchanged hands as compared to its average daily volume of 820,100 shares. The stock ranged in price between $27.57-$27.98 after having opened the day at $27.84 as compared to the previous trading day's close of $28.21.

Koninklijke Philips N.V. is engaged in healthcare, consumer lifestyle, and lighting businesses worldwide. Royal Philips has a market cap of $25.8 billion and is part of the consumer goods sector. Shares are down 2.7% year-to-date as of the close of trading on Thursday. Currently there is 1 analyst who rates Royal Philips a buy, no analysts rate it a sell, and 1 rates it a hold.

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TheStreet Ratings rates Royal Philips as a hold. The company's strengths can be seen in multiple areas, such as its largely solid financial position with reasonable debt levels by most measures and expanding profit margins. However, as a counter to these strengths, we also find weaknesses including a generally disappointing performance in the stock itself, deteriorating net income and disappointing return on equity.

Highlights from TheStreet Ratings analysis on PHG go as follows:

  • The current debt-to-equity ratio, 0.38, is low and is below the industry average, implying that there has been successful management of debt levels. Although the company had a strong debt-to-equity ratio, its quick ratio of 0.74 is somewhat weak and could be cause for future problems.
  • 44.83% is the gross profit margin for KONINKLIJKE PHILIPS NV which we consider to be strong. Regardless of PHG's high profit margin, it has managed to decrease from the same period last year. Despite the mixed results of the gross profit margin, PHG's net profit margin of 2.15% is significantly lower than the industry average.
  • 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 Industrial Conglomerates industry. The net income has significantly decreased by 73.6% when compared to the same quarter one year ago, falling from $582.11 million to $153.66 million.
  • The share price of KONINKLIJKE PHILIPS NV has not done very well: it is down 20.04% and has underperformed the S&P 500, in part reflecting the company's sharply declining earnings per share when compared to the year-earlier quarter. Looking ahead, we do not see anything in this company's numbers that would change the one-year trend. It was down over the last twelve months; and it could be down again in the next twelve. Naturally, a bull or bear market could sway the movement of this stock.

You can view the full analysis from the report here: Royal Philips Ratings Report

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At the close, American Electric Technologies ( AETI) was down $0.26 (5.2%) to $4.72 on heavy volume. Throughout the day, 44,788 shares of American Electric Technologies exchanged hands as compared to its average daily volume of 9,700 shares. The stock ranged in price between $4.67-$4.98 after having opened the day at $4.98 as compared to the previous trading day's close of $4.98.

American Electric Technologies, Inc. provides power delivery solutions to the energy industry in the United States and internationally. American Electric Technologies has a market cap of $43.8 million and is part of the consumer goods sector. Shares are down 9.9% year-to-date as of the close of trading on Thursday.

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TheStreet Ratings rates American Electric Technologies as a hold. The company's strengths can be seen in multiple areas, such as its largely solid financial position with reasonable debt levels by most measures and good cash flow from operations. However, as a counter to these strengths, we also find weaknesses including a generally disappointing performance in the stock itself, deteriorating net income and disappointing return on equity.

Highlights from TheStreet Ratings analysis on AETI go as follows:

  • AETI's debt-to-equity ratio is very low at 0.02 and is currently below that of the industry average, implying that there has been very successful management of debt levels. Along with the favorable debt-to-equity ratio, the company maintains an adequate quick ratio of 1.13, which illustrates the ability to avoid short-term cash problems.
  • Net operating cash flow has significantly increased by 141.01% to $0.92 million when compared to the same quarter last year. In addition, AMERICAN ELECTRIC TECH INC has also vastly surpassed the industry average cash flow growth rate of -21.80%.
  • AETI, with its decline in revenue, slightly underperformed the industry average of 7.2%. Since the same quarter one year prior, revenues fell by 12.0%. Weakness in the company's revenue seems to have hurt the bottom line, decreasing earnings per share.
  • 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, AMERICAN ELECTRIC TECH INC's return on equity significantly trails that of both the industry average and the S&P 500.
  • The gross profit margin for AMERICAN ELECTRIC TECH INC is currently extremely low, coming in at 7.65%. It has decreased significantly from the same period last year. Along with this, the net profit margin of -14.02% is significantly below that of the industry average.

You can view the full analysis from the report here: American Electric Technologies 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.

LGL Group ( LGL) was another company that pushed the Industrial industry lower today. LGL Group was down $0.34 (8.2%) to $3.80 on light volume. Throughout the day, 1,450 shares of LGL Group exchanged hands as compared to its average daily volume of 3,400 shares. The stock ranged in price between $3.80-$3.80 after having opened the day at $3.80 as compared to the previous trading day's close of $4.14.

The LGL Group, Inc., through its subsidiaries, designs, manufactures, and markets standard and custom-engineered electronic components in the United States and internationally. LGL Group has a market cap of $10.7 million and is part of the consumer goods sector. Shares are up 15.6% year-to-date as of the close of trading on Thursday.

TheStreet Ratings rates LGL Group as a sell. The company's weaknesses can be seen in multiple areas, such as its weak operating cash flow and generally disappointing historical performance in the stock itself.

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

Highlights from TheStreet Ratings analysis on LGL go as follows:

  • Net operating cash flow has significantly decreased to -$0.52 million or 316.73% when compared to the same quarter last year. In addition, when comparing to the industry average, the firm's growth rate is much lower.
  • LGL'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 29.35%, 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.
  • 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. Compared to other companies in the Electronic Equipment, Instruments & Components industry and the overall market, LGL GROUP INC's return on equity significantly trails that of both the industry average and the S&P 500.
  • LGL GROUP INC reported significant earnings per share improvement in the most recent quarter compared to 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, LGL GROUP INC reported poor results of -$3.16 versus -$0.51 in the prior year.
  • LGL, with its decline in revenue, slightly underperformed the industry average of 0.6%. Since the same quarter one year prior, revenues slightly dropped by 8.5%. The declining revenue has not hurt the company's bottom line, with increasing earnings per share.

You can view the full analysis from the report here: LGL Group 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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