3 Automotive Stocks Pushing Industry Growth

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All three major indices are trading down today with the Dow Jones Industrial Average ( ^DJI) trading down 60.59 points (-0.3%) at 17,824 as of Friday, Feb. 6, 2015, 4:20 PM ET. The NYSE advances/declines ratio sits at 1,145 issues advancing vs. 1,963 declining with 115 unchanged.

The Automotive industry as a whole closed the day up 0.6% versus the S&P 500, which was down 0.3%. Top gainers within the Automotive industry included Sypris Solutions ( SYPR), up 1.9%, Quantum Fuel Systems Technologies Worldwide ( QTWW), up 3.7%, VOXX International ( VOXX), up 2.0%, Modine Manufacturing ( MOD), up 2.9% and Federal-Mogul Holdings ( FDML), up 1.8%.

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

VOXX International ( VOXX) is one of the companies that pushed the Automotive industry higher today. VOXX International was up $0.17 (2.0%) to $8.75 on average volume. Throughout the day, 173,215 shares of VOXX International exchanged hands as compared to its average daily volume of 207,400 shares. The stock ranged in a price between $8.45-$8.96 after having opened the day at $8.61 as compared to the previous trading day's close of $8.58.

Voxx International Corporation, together with its subsidiaries, operates as a manufacturer and distributor in the automotive, premium audio, and consumer accessories industries in the United States and internationally. VOXX International has a market cap of $188.0 million and is part of the consumer goods sector. Shares are down 2.0% year-to-date as of the close of trading on Thursday. Currently there is 1 analyst who rates VOXX International a buy, no analysts rate it a sell, and 3 rate it a hold.

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TheStreet Ratings rates VOXX International 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, good cash flow from operations and growth in earnings per share. However, as a counter to these strengths, we also find weaknesses including disappointing return on equity, a generally disappointing performance in the stock itself and poor profit margins.

Highlights from TheStreet Ratings analysis on VOXX go as follows:

  • VOXX's debt-to-equity ratio is very low at 0.24 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 1.01, which illustrates the ability to avoid short-term cash problems.
  • Net operating cash flow has significantly increased by 335.85% to $6.57 million when compared to the same quarter last year. In addition, VOXX INTERNATIONAL CORP has also vastly surpassed the industry average cash flow growth rate of -34.39%.
  • VOXX INTERNATIONAL CORP's earnings per share improvement from the most recent quarter was slightly positive. This company has reported somewhat volatile earnings recently. But, we feel it is poised for EPS growth in the coming year. During the past fiscal year, VOXX INTERNATIONAL CORP swung to a loss, reporting -$1.09 versus $0.96 in the prior year. This year, the market expects an improvement in earnings ($0.55 versus -$1.09).
  • VOXX'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 38.24%, 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.
  • 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 Distributors industry and the overall market, VOXX INTERNATIONAL CORP'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: VOXX International Ratings Report

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