The Consumer Durables industry as a whole closed the day down 2.2% versus the S&P 500, which was down 1.3%. Laggards within the Consumer Durables industry included Koss ( KOSS), down 1.6%, Natuzzi SPA ( NTZ), down 1.6%, SGOCO Group ( SGOC), down 8.0%, Virco Manufacturing ( VIRC), down 2.1% and Emerson Radio ( MSN), down 1.6%.

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

Callaway Golf ( ELY) is one of the companies that pushed the Consumer Durables industry lower today. Callaway Golf was down $0.30 (3.4%) to $8.63 on average volume. Throughout the day, 513,169 shares of Callaway Golf exchanged hands as compared to its average daily volume of 624,500 shares. The stock ranged in price between $8.63-$8.87 after having opened the day at $8.81 as compared to the previous trading day's close of $8.93.

Callaway Golf Company, together with its subsidiaries, designs, manufactures, and sells golf clubs and balls. It offers drivers, fairway woods, hybrids, irons, wedges, and putters. Callaway Golf has a market cap of $712.8 million and is part of the consumer goods sector. Shares are up 16.0% year-to-date as of the close of trading on Wednesday. Currently there are 5 analysts who rate Callaway Golf a buy, no analysts rate it a sell, and 4 rate it a hold.

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TheStreet Ratings rates Callaway Golf as a hold. The company's strengths can be seen in multiple areas, such as its solid stock price performance, compelling growth in net income and expanding profit margins. However, as a counter to these strengths, we find that we feel that the company's cash flow from its operations has been weak overall.

Highlights from TheStreet Ratings analysis on ELY go as follows:

  • Looking at where the stock is today compared to one year ago, we find that it is not only higher, but it has also clearly outperformed the rise in the S&P 500 over the same period. Although other factors naturally played a role, the company's strong earnings growth was key. Despite the fact that it has already risen in the past year, there is currently no conclusive evidence that warrants the purchase or sale of this stock.
  • The net income growth from the same quarter one year ago has significantly exceeded that of the S&P 500 and the Leisure Equipment & Products industry. The net income increased by 280.5% when compared to the same quarter one year prior, rising from $3.37 million to $12.82 million.
  • 46.05% is the gross profit margin for CALLAWAY GOLF CO which we consider to be strong. It has increased from the same quarter the previous year. Regardless of the strong results of the gross profit margin, the net profit margin of 5.56% trails the industry average.
  • Current return on equity exceeded its ROE from the same quarter one year prior. This is a clear sign of strength within the company. Compared to other companies in the Leisure Equipment & Products industry and the overall market, CALLAWAY GOLF CO's return on equity significantly trails that of both the industry average and the S&P 500.
  • Net operating cash flow has decreased to $57.68 million or 38.28% when compared to the same quarter last year. In addition, when comparing to the industry average, the firm's growth rate is much lower.

You can view the full analysis from the report here: Callaway Golf Ratings Report

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At the close, Virco Manufacturing ( VIRC) was down $0.05 (2.1%) to $2.47 on light volume. Throughout the day, 5,958 shares of Virco Manufacturing exchanged hands as compared to its average daily volume of 13,400 shares. The stock ranged in price between $2.47-$2.50 after having opened the day at $2.49 as compared to the previous trading day's close of $2.52.

Virco Mfg. Corporation engages in the design, production, and distribution of furniture for the commercial and education markets in the United States. Virco Manufacturing has a market cap of $37.4 million and is part of the consumer goods sector. Shares are up 3.3% year-to-date as of the close of trading on Wednesday. Currently there are no analysts who rate Virco Manufacturing a buy, no analysts rate it a sell, and 1 rates it a hold.

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TheStreet Ratings rates Virco Manufacturing as a hold. The company's strengths can be seen in multiple areas, such as its impressive record of earnings per share growth, compelling growth in net income and reasonable valuation levels. However, as a counter to these strengths, we also find weaknesses including a generally disappointing performance in the stock itself and generally higher debt management risk.

Highlights from TheStreet Ratings analysis on VIRC go as follows:

  • VIRCO MFG. CORP has improved earnings per share by 19.2% 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. We feel that this trend should continue. This trend suggests that the performance of the business is improving. During the past fiscal year, VIRCO MFG. CORP turned its bottom line around by earning $0.05 versus -$0.13 in the prior year. This year, the market expects an improvement in earnings ($0.29 versus $0.05).
  • 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 17.6% when compared to the same quarter one year prior, going from -$3.86 million to -$3.18 million.
  • Net operating cash flow has increased to -$10.02 million or 10.91% when compared to the same quarter last year. Despite an increase in cash flow, VIRCO MFG. CORP's average is still marginally south of the industry average growth rate of 16.44%.
  • VIRC has underperformed the S&P 500 Index, declining 9.10% from its price level of one year ago. The fact that the stock is now selling for less than others in its industry in relation to its current earnings is not reason enough to justify a buy rating at this time.
  • Even though the current debt-to-equity ratio is 1.04, it is still below the industry average, suggesting that this level of debt is acceptable within the Commercial Services & Supplies industry. Even though the debt-to-equity ratio shows mixed results, the company's quick ratio of 0.27 is very low and demonstrates very weak liquidity.

You can view the full analysis from the report here: Virco Manufacturing Ratings Report

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Natuzzi SPA ( NTZ) was another company that pushed the Consumer Durables industry lower today. Natuzzi SPA was down $0.04 (1.6%) to $2.21 on light volume. Throughout the day, 5,616 shares of Natuzzi SPA exchanged hands as compared to its average daily volume of 12,300 shares. The stock ranged in price between $2.12-$2.26 after having opened the day at $2.18 as compared to the previous trading day's close of $2.25.

Natuzzi S.p.A. designs, manufactures, and markets leather and fabric upholstered furniture worldwide. Natuzzi SPA has a market cap of $121.2 million and is part of the consumer goods sector. Shares are up 44.9% year-to-date as of the close of trading on Wednesday.

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

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Highlights from TheStreet Ratings analysis on NTZ go as follows:

  • Net operating cash flow has significantly decreased to -$9.56 million or 123.81% 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.
  • The gross profit margin for NATUZZI SPA is currently lower than what is desirable, coming in at 31.43%. Regardless of NTZ's low profit margin, it has managed to increase from the same period last year. Despite the mixed results of the gross profit margin, NTZ's net profit margin of -7.99% significantly underperformed when compared to the industry average.
  • NTZ has underperformed the S&P 500 Index, declining 6.44% from its price level of one year ago. The fact that the stock is now selling for less than others in its industry in relation to its current earnings is not reason enough to justify a buy rating at this time.
  • The company, on the basis of net income growth from the same quarter one year ago, has significantly underperformed compared to the Household Durables industry average, but is greater than that of the S&P 500. The net income increased by 22.0% when compared to the same quarter one year prior, going from -$13.50 million to -$10.53 million.
  • Current return on equity exceeded its ROE from the same quarter one year prior. This is a clear sign of strength within the company. 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.

You can view the full analysis from the report here: Natuzzi SPA Ratings Report

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