3 Stocks Pushing The Consumer Goods Sector 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 Consumer Goods sector as a whole closed the day down 0.1% versus the S&P 500, which was down 0.4%. Laggards within the Consumer Goods sector included Natuzzi SPA ( NTZ), down 10.3%, Bridgford Foods ( BRID), down 2.5%, CCA Industries ( CAW), down 2.3%, Leading Brands ( LBIX), down 2.1% and Willamette Valley Vineyards ( WVVI), down 1.7%.

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

Royal Philips ( PHG) is one of the companies that pushed the Consumer Goods sector lower today. Royal Philips was down $0.76 (2.6%) to $28.20 on heavy volume. Throughout the day, 1,368,006 shares of Royal Philips exchanged hands as compared to its average daily volume of 860,400 shares. The stock ranged in price between $28.16-$28.46 after having opened the day at $28.27 as compared to the previous trading day's close of $28.96.

Koninklijke Philips N.V. is engaged in healthcare, consumer lifestyle, and lighting businesses worldwide. Royal Philips has a market cap of $25.9 billion and is part of the consumer durables industry. Shares are down 0.1% year-to-date as of the close of trading on Tuesday. 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 18.50% 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, Leading Brands ( LBIX) was down $0.07 (2.1%) to $3.31 on average volume. Throughout the day, 6,166 shares of Leading Brands exchanged hands as compared to its average daily volume of 7,100 shares. The stock ranged in price between $3.31-$3.44 after having opened the day at $3.31 as compared to the previous trading day's close of $3.38.

Leading Brands, Inc., together with its subsidiaries, is engaged in the development, production, marketing, and distribution of beverages in Canada, the western United States, and Asia. Leading Brands has a market cap of $9.8 million and is part of the consumer durables industry. Shares are down 4.0% year-to-date as of the close of trading on Tuesday.

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TheStreet Ratings rates Leading Brands as a sell. The company's weaknesses can be seen in multiple areas, such as its generally disappointing historical performance in the stock itself, deteriorating net income, disappointing return on equity and weak operating cash flow.

Highlights from TheStreet Ratings analysis on LBIX go as follows:

  • The share price of LEADING BRANDS INC has not done very well: it is down 7.04% 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, other than the push or pull of the broad market, we do not see anything in the company's numbers that may help reverse the decline experienced over the past 12 months. Despite the past decline, the stock is still selling for more than most others in its industry.
  • 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 182.1% when compared to the same quarter one year ago, falling from $0.10 million to -$0.08 million.
  • Current return on equity is lower than its ROE from the same quarter one year prior. This is a clear sign of weakness within the company. Compared to other companies in the Beverages industry and the overall market on the basis of return on equity, LEADING BRANDS INC underperformed against that of the industry average and is significantly less than that of the S&P 500.
  • Net operating cash flow has significantly decreased to -$0.01 million or 102.31% when compared to the same quarter last year. In addition, when comparing to the industry average, the firm's growth rate is much lower.
  • 39.17% is the gross profit margin for LEADING BRANDS INC which we consider to be strong. Regardless of LBIX's high profit margin, it has managed to decrease from the same period last year. Despite the mixed results of the gross profit margin, LBIX's net profit margin of -2.73% significantly underperformed when compared to the industry average.

You can view the full analysis from the report here: Leading Brands 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.

Natuzzi SPA ( NTZ) was another company that pushed the Consumer Goods sector lower today. Natuzzi SPA was down $0.18 (10.3%) to $1.56 on light volume. Throughout the day, 1,550 shares of Natuzzi SPA exchanged hands as compared to its average daily volume of 5,000 shares. The stock ranged in price between $1.56-$1.69 after having opened the day at $1.69 as compared to the previous trading day's close of $1.74.

Natuzzi S.p.A. designs, manufactures, and markets leather and fabric upholstered furniture worldwide. Natuzzi SPA has a market cap of $97.6 million and is part of the consumer durables industry. Shares are up 12.3% year-to-date as of the close of trading on Tuesday.

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

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Highlights from TheStreet Ratings analysis on NTZ 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 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 30.78%. It has decreased from the same quarter the previous year. Along with this, the net profit margin of -7.81% is significantly below that of the industry average.
  • Net operating cash flow has significantly decreased to -$28.70 million or 586.21% when compared to the same quarter last year. In addition, when comparing to the industry average, the firm's growth rate is much lower.
  • NTZ'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 31.91%, 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.
  • NATUZZI SPA 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, NATUZZI SPA reported poor results of -$1.71 versus -$0.63 in the prior year.

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.

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