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3 Stocks Improving Performance Of The Diversified Services Industry

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.

All three major indices traded up today with the Dow Jones Industrial Average ( ^DJI) trading up 26 points (0.2%) at 16,807 as of Tuesday, June 17, 2014, 3:55 PM ET. The NYSE advances/declines ratio sits at 1,847 issues advancing vs. 1,167 declining with 138 unchanged.

The Diversified Services industry as a whole closed the day up 0.7% versus the S&P 500, which was up 0.2%. Top gainers within the Diversified Services industry included Universal Security Instruments ( UUU), up 3.6%, VirtualScopics ( VSCP), up 8.2%, UniTek Global Services ( UNTK), up 2.0%, PDI ( PDII), up 2.0% and China HGS Real Estate ( HGSH), up 3.5%.

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

UniTek Global Services ( UNTK) is one of the companies that pushed the Diversified Services industry higher today. UniTek Global Services was up $0.01 (2.0%) to $0.45 on light volume. Throughout the day, 26,644 shares of UniTek Global Services exchanged hands as compared to its average daily volume of 60,200 shares. The stock ranged in a price between $0.42-$0.48 after having opened the day at $0.42 as compared to the previous trading day's close of $0.44.

UniTek Global Services, Inc. provides technical services to the wireless telecommunications, public safety, satellite television, and broadband cable industries in the United States and Canada. The company operates in two segments, Fulfillment, and Engineering and Construction. UniTek Global Services has a market cap of $9.0 million and is part of the services sector. Shares are down 73.6% year-to-date as of the close of trading on Monday. Currently there are no analysts who rate UniTek Global Services a buy, no analysts rate it a sell, and 1 rates it a hold.

STOCKS TO BUY: TheStreet Quant Ratings has identified a handful of stocks that can potentially TRIPLE in the next 12 months. Learn more.

TheStreet Ratings rates UniTek Global Services as a sell. The company's weaknesses can be seen in multiple areas, such as its deteriorating net income, poor profit margins, weak operating cash flow, generally disappointing historical performance in the stock itself and feeble growth in its earnings per share.

Highlights from TheStreet Ratings analysis on UNTK go as follows:

  • 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 Construction & Engineering industry. The net income has significantly decreased by 156.1% when compared to the same quarter one year ago, falling from -$7.66 million to -$19.63 million.
  • The gross profit margin for UNITEK GLOBAL SERVICES INC is currently extremely low, coming in at 14.98%. It has decreased from the same quarter the previous year. Along with this, the net profit margin of -22.15% is significantly below that of the industry average.
  • Net operating cash flow has significantly decreased to -$2.32 million or 135.15% when compared to the same quarter last year. In addition, when comparing to the industry average, the firm's growth rate is much lower.
  • Despite any intermediate fluctuations, we have only bad news to report on this stock's performance over the last year: it has tumbled by 62.98%, worse than the S&P 500's performance. Consistent with the plunge in the stock price, the company's earnings per share are down 175.67% compared to the year-earlier 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.
  • UNITEK GLOBAL SERVICES INC has experienced a steep decline in earnings per share in the most recent quarter in comparison to its performance from the same quarter a year ago. The company has reported a trend of declining earnings per share over the past year. However, the consensus estimate suggests that this trend should reverse in the coming year. During the past fiscal year, UNITEK GLOBAL SERVICES INC reported poor results of -$2.65 versus -$2.28 in the prior year. This year, the market expects an improvement in earnings (-$0.99 versus -$2.65).

You can view the full analysis from the report here: UniTek Global Services 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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