3 Food & Beverage Stocks Pushing The Industry 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.

One 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 5.41 points (0.0%) at 17,746 as of Thursday, July 30, 2015, 4:20 PM ET. The NYSE advances/declines ratio sits at 1,569 issues advancing vs. 1,503 declining with 140 unchanged.

The Food & Beverage industry as a whole closed the day up 0.3% versus the S&P 500, which was unchanged. Top gainers within the Food & Beverage industry included Pingtan Marine Enterprise ( PME), up 6.4%, Tofutti Brands ( TOF), up 3.9%, China New Borun ( BORN), up 4.0%, Primo Water ( PRMW), up 3.7% and Origin Agritech ( SEED), up 6.6%.

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

Origin Agritech ( SEED) is one of the companies that pushed the Food & Beverage industry higher today. Origin Agritech was up $0.10 (6.6%) to $1.61 on light volume. Throughout the day, 48,008 shares of Origin Agritech exchanged hands as compared to its average daily volume of 354,600 shares. The stock ranged in a price between $1.51-$1.63 after having opened the day at $1.51 as compared to the previous trading day's close of $1.51.

Origin Agritech Limited, an agricultural biotechnology company, engages in crop seed breeding and genetic improvement activities in the People's Republic of China. Origin Agritech has a market cap of $34.3 million and is part of the consumer goods sector. Shares are up 2.7% year-to-date as of the close of trading on Wednesday. Currently there are no analysts who rate Origin Agritech a buy, no analysts rate it a sell, and none rate it a hold.

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TheStreet Ratings rates Origin Agritech as a sell. The company's weaknesses can be seen in multiple areas, such as its generally high debt management risk and generally disappointing historical performance in the stock itself.

Highlights from TheStreet Ratings analysis on SEED go as follows:

  • The debt-to-equity ratio of 1.48 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 0.06, which clearly demonstrates the inability to cover short-term cash needs.
  • SEED'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 28.06%, 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 company's current return on equity greatly increased when compared to its ROE from the same quarter one year prior. This is a signal of significant strength within the corporation. In comparison to the other companies in the Food Products industry and the overall market, ORIGIN AGRITECH LTD's return on equity is significantly below that of the industry average and is below that of the S&P 500.
  • ORIGIN AGRITECH LTD has improved earnings per share by 41.9% 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, ORIGIN AGRITECH LTD swung to a loss, reporting -$0.07 versus $0.05 in the prior year.
  • Regardless of the drop in revenue, the company managed to outperform against the industry average of 12.2%. Since the same quarter one year prior, revenues slightly dropped by 6.2%. 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: Origin Agritech Ratings Report

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At the close, Primo Water ( PRMW) was up $0.22 (3.7%) to $6.22 on average volume. Throughout the day, 46,953 shares of Primo Water exchanged hands as compared to its average daily volume of 53,000 shares. The stock ranged in a price between $5.88-$6.23 after having opened the day at $5.95 as compared to the previous trading day's close of $6.00.

Primo Water Corporation, together with its subsidiaries, provides multi-gallon purified bottled water, self-service refill water, and water dispensers in the United States and Canada. The company operates in two segments, Primo Water and Primo Dispensers. Primo Water has a market cap of $150.2 million and is part of the consumer goods sector. Shares are up 39.9% year-to-date as of the close of trading on Wednesday. Currently there are 5 analysts who rate Primo Water a buy, no analysts rate it a sell, and none rate it a hold.

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TheStreet Ratings rates Primo Water as a sell. The company's weaknesses can be seen in multiple areas, such as its generally high debt management risk, disappointing return on equity, poor profit margins and weak operating cash flow.

Highlights from TheStreet Ratings analysis on PRMW go as follows:

  • The debt-to-equity ratio of 1.13 is relatively high when compared with the industry average, suggesting a need for better debt level management. To add to this, PRMW has a quick ratio of 0.68, this demonstrates the lack of ability of the company to cover short-term liquidity needs.
  • 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, PRIMO WATER CORP's return on equity significantly trails that of both the industry average and the S&P 500.
  • The gross profit margin for PRIMO WATER CORP is currently lower than what is desirable, coming in at 26.21%. It has decreased from the same quarter the previous year. Along with this, the net profit margin of -0.81% is significantly below that of the industry average.
  • Net operating cash flow has significantly decreased to $1.83 million or 58.00% 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.
  • PRIMO WATER CORP reported significant earnings per share improvement in the most recent quarter compared to the same quarter a year ago. 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, PRIMO WATER CORP reported poor results of -$0.53 versus -$0.38 in the prior year. This year, the market expects an improvement in earnings ($0.06 versus -$0.53).

You can view the full analysis from the report here: Primo Water Ratings Report

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China New Borun ( BORN) was another company that pushed the Food & Beverage industry higher today. China New Borun was up $0.04 (4.0%) to $1.05 on light volume. Throughout the day, 33,088 shares of China New Borun exchanged hands as compared to its average daily volume of 48,200 shares. The stock ranged in a price between $1.00-$1.05 after having opened the day at $1.01 as compared to the previous trading day's close of $1.01.

China New Borun Corporation produces and distributes corn-based edible alcohol in the People's Republic of China. China New Borun has a market cap of $26.2 million and is part of the consumer goods sector. Shares are down 21.3% year-to-date as of the close of trading on Wednesday. Currently there are no analysts who rate China New Borun a buy, no analysts rate it a sell, and none rate it a hold.

TheStreet Ratings rates China New Borun as a hold. The company's strengths can be seen in multiple areas, such as its attractive valuation levels and largely solid financial position with reasonable debt levels by most measures. However, as a counter to these strengths, we also find weaknesses including deteriorating net income, disappointing return on equity and poor profit margins.

Highlights from TheStreet Ratings analysis on BORN go as follows:

  • The debt-to-equity ratio is somewhat low, currently at 0.87, and is less than that of the industry average, implying that there has been a relatively successful effort in the management of debt levels. Although the company had a strong debt-to-equity ratio, its quick ratio of 0.91 is somewhat weak and could be cause for future problems.
  • Regardless of the drop in revenue, the company managed to outperform against the industry average of 8.7%. Since the same quarter one year prior, revenues slightly dropped by 7.7%. Weakness in the company's revenue seems to have hurt the bottom line, decreasing earnings per share.
  • The company's current return on equity has slightly decreased from the same quarter one year prior. This implies a minor weakness in the organization. Compared to other companies in the Beverages industry and the overall market, CHINA NEW BORUN CORP -ADR's return on equity significantly trails that of both the industry average and the S&P 500.
  • The gross profit margin for CHINA NEW BORUN CORP -ADR is currently extremely low, coming in at 10.38%. It has decreased from the same quarter the previous year. Along with this, the net profit margin of 2.76% significantly trails the industry average.

You can view the full analysis from the report here: China New Borun Ratings Report

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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.