3 Stocks Pushing The Industrial Goods Sector Lower

The Industrial Goods sector as a whole closed the day up 0.4% versus the S&P 500, which was up 0.3%. Laggards within the Industrial Goods sector included Bonso Electronics International ( BNSO), down 12.7%, Micronet Enertec Technologies ( MICT), down 5.7%, Compx International ( CIX), down 2.6%, Euro Tech Holdings ( CLWT), down 2.6% and India Globalization Capital ( IGC), down 4.2%.

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

Hollysys Automation Technologies ( HOLI) is one of the companies that pushed the Industrial Goods sector lower today. Hollysys Automation Technologies was down $0.59 (3.1%) to $18.70 on heavy volume. Throughout the day, 825,452 shares of Hollysys Automation Technologies exchanged hands as compared to its average daily volume of 389,700 shares. The stock ranged in price between $18.42-$19.20 after having opened the day at $18.96 as compared to the previous trading day's close of $19.29.

Hollysys Automation Technologies Ltd. Hollysys Automation Technologies has a market cap of $1.1 billion and is part of the industrial industry. Shares are down 21.0% year-to-date as of the close of trading on Friday. Currently there are 2 analysts who rate Hollysys Automation Technologies a buy, no analysts rate it a sell, and none rate it a hold.

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TheStreet Ratings rates Hollysys Automation Technologies as a buy. The company's strengths can be seen in multiple areas, such as its largely solid financial position with reasonable debt levels by most measures, notable return on equity, expanding profit margins and good cash flow from operations. We feel its strengths outweigh the fact that the company has had lackluster performance in the stock itself.

Highlights from TheStreet Ratings analysis on HOLI go as follows:

  • HOLI's debt-to-equity ratio is very low at 0.09 and is currently below that of the industry average, implying that there has been very successful management of debt levels. To add to this, HOLI has a quick ratio of 2.01, which demonstrates the ability of the company to cover short-term liquidity needs.
  • 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, HOLLYSYS AUTOMATION TECH LTD's return on equity exceeds that of both the industry average and the S&P 500.
  • 42.61% is the gross profit margin for HOLLYSYS AUTOMATION TECH LTD which we consider to be strong. It has increased from the same quarter the previous year. Along with this, the net profit margin of 13.13% is above that of the industry average.
  • Net operating cash flow has significantly increased by 66.20% to $76.57 million when compared to the same quarter last year. In addition, HOLLYSYS AUTOMATION TECH LTD has also vastly surpassed the industry average cash flow growth rate of 7.00%.
  • HOLLYSYS AUTOMATION TECH LTD's earnings per share declined by 13.9% 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, HOLLYSYS AUTOMATION TECH LTD increased its bottom line by earning $1.62 versus $1.19 in the prior year. This year, the market expects an improvement in earnings ($1.87 versus $1.62).

You can view the full analysis from the report here: Hollysys Automation Technologies Ratings Report

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At the close, India Globalization Capital ( IGC) was down $0.01 (4.2%) to $0.27 on light volume. Throughout the day, 12,484 shares of India Globalization Capital exchanged hands as compared to its average daily volume of 34,400 shares. The stock ranged in price between $0.24-$0.27 after having opened the day at $0.26 as compared to the previous trading day's close of $0.28.

India Globalization Capital, Inc., through its subsidiaries, engages in trading electronics; and the rental of heavy equipment in Hong Kong and India. India Globalization Capital has a market cap of $4.0 million and is part of the industrial industry. Shares are down 58.4% year-to-date as of the close of trading on Friday.

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TheStreet Ratings rates India Globalization Capital as a sell. The company's weaknesses can be seen in multiple areas, such as its deteriorating net income, disappointing return on equity, poor profit margins and generally disappointing historical performance in the stock itself.

Highlights from TheStreet Ratings analysis on IGC go as follows:

  • The company, on the basis of change in net income from the same quarter one year ago, has underperformed when compared to that of the S&P 500 and greatly underperformed compared to the Electronic Equipment, Instruments & Components industry average. The net income has significantly decreased by 31.0% when compared to the same quarter one year ago, falling from -$1.46 million to -$1.92 million.
  • 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 Electronic Equipment, Instruments & Components industry and the overall market, INDIA GLOBALIZATION CAPITAL's return on equity significantly trails that of both the industry average and the S&P 500.
  • The gross profit margin for INDIA GLOBALIZATION CAPITAL is currently extremely low, coming in at 5.41%. It has decreased significantly from the same period last year. Along with this, the net profit margin of -85.01% is significantly below that of the industry average.
  • IGC'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 67.08%, 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.
  • IGC's debt-to-equity ratio is very low at 0.22 and is currently below that of the industry average, implying that there has been very 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.

You can view the full analysis from the report here: India Globalization Capital Ratings Report

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Compx International ( CIX) was another company that pushed the Industrial Goods sector lower today. Compx International was down $0.29 (2.6%) to $10.78 on light volume. Throughout the day, 215 shares of Compx International exchanged hands as compared to its average daily volume of 700 shares. The stock ranged in price between $10.78-$10.78 after having opened the day at $10.78 as compared to the previous trading day's close of $11.07.

CompX International Inc. engages in the manufacture and sale of security products and recreational marine components primarily in North America. The company operates through two segments, Security Products and Marine Components. Compx International has a market cap of $27.4 million and is part of the industrial industry. Shares are down 8.4% year-to-date as of the close of trading on Friday.

TheStreet Ratings rates Compx International as a buy. The company's strengths can be seen in multiple areas, such as its revenue growth, largely solid financial position with reasonable debt levels by most measures, solid stock price performance, growth in earnings per share and increase in net income. We feel its strengths outweigh the fact that the company shows weak operating cash flow.

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Highlights from TheStreet Ratings analysis on CIX go as follows:

  • The revenue growth came in higher than the industry average of 5.3%. Since the same quarter one year prior, revenues slightly increased by 8.2%. This growth in revenue appears to have trickled down to the company's bottom line, improving the earnings per share.
  • CIX has no debt to speak of therefore resulting in a debt-to-equity ratio of zero, which we consider to be a relatively favorable sign. Along with this, the company maintains a quick ratio of 5.13, which clearly demonstrates the ability to cover short-term cash needs.
  • The stock has risen over the past year as investors have generally rewarded the company for its earnings growth and other positive factors like the ones we have cited in this report. Turning our attention to the future direction of the stock, it goes without saying that even the best stocks can fall in an overall down market. However, in any other environment, this stock still has good upside potential despite the fact that it has already risen in the past year.
  • COMPX INTERNATIONAL INC has improved earnings per share by 11.8% 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. During the past fiscal year, COMPX INTERNATIONAL INC increased its bottom line by earning $0.70 versus $0.49 in the prior year.
  • The net income growth from the same quarter one year ago has significantly exceeded that of the S&P 500 and the Commercial Services & Supplies industry. The net income increased by 12.8% when compared to the same quarter one year prior, going from $2.14 million to $2.41 million.

You can view the full analysis from the report here: Compx International Ratings Report

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