3 Stocks Driving The Diversified Services 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 or Stephanie Link.All three major indices traded up today with the Dow Jones Industrial Average (^DJI) trading up 94 points (0.6%) at 16,903 as of Wednesday, June 18, 2014, 3:55 PM ET. The NYSE advances/declines ratio sits at 1,336 issues advancing vs. 1,652 declining with 168 unchanged.The Diversified Services industry as a whole closed the day up 0.3% versus the S&P 500, which was up 0.7%. Top gainers within the Diversified Services industry included PDI (PDII), up 2.5%, Essex Rental (ESSX), up 6.1%, Internet Patents (PTNT), up 2.9%, RCM Technologies (RCMT), up 1.5% and Hudson Global (HSON), up 3.1%.TheStreet Ratings Group would like to highlight 3 stocks pushing the industry higher today:RCM Technologies (RCMT) is one of the companies that pushed the Diversified Services industry higher today. RCM Technologies was up $0.10 (1.5%) to $6.68 on average volume. Throughout the day, 9,643 shares of RCM Technologies exchanged hands as compared to its average daily volume of 12,000 shares. The stock ranged in a price between $6.50-$6.68 after having opened the day at $6.57 as compared to the previous trading day's close of $6.58. RCM Technologies, Inc. designs, develops, and delivers business and technology solutions to commercial and government sectors in the United States, Canada, and Puerto Rico. The company operates in three segments: Engineering, Information Technology, and Specialty Health Care Services. RCM Technologies has a market cap of $82.0 million and is part of the services sector. Shares are down 5.7% year-to-date as of the close of trading on Tuesday. Currently there are no analysts who rate RCM Technologies a buy, no analysts rate it a sell, and none rate 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 RCM Technologies as a buy. The company's strengths can be seen in multiple areas, such as its robust revenue growth, largely solid financial position with reasonable debt levels by most measures, reasonable valuation levels, increase in stock price during the past year and growth in earnings per share. We feel these strengths outweigh the fact that the company has had somewhat disappointing return on equity.Highlights from TheStreet Ratings analysis on RCMT go as follows:
- RCMT's revenue growth has slightly outpaced the industry average of 11.9%. Since the same quarter one year prior, revenues rose by 17.8%. This growth in revenue appears to have trickled down to the company's bottom line, improving the earnings per share.
- RCMT 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 2.73, 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. The stock's price rise over the last year has driven it to a level which is somewhat expensive compared to the rest of its industry. We feel, however, that other strengths this company displays justify these higher price levels.
- RCM TECHNOLOGIES INC has improved earnings per share by 25.0% 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, RCM TECHNOLOGIES INC reported lower earnings of $0.16 versus $0.26 in the prior year.
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