3 Stocks Driving The Diversified Services Industry Higher - TheStreet

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.

One out of the three major indices traded up today Two out of the three major indices traded up today with the

Dow Jones Industrial Average

(

^DJI

) trading up 31 points (0.2%) at 17,848 as of Tuesday, Nov. 25, 2014, 3:25 PM ET. The NYSE advances/declines ratio sits at 1,614 issues advancing vs. 1,392 declining with 174 unchanged.

The Diversified Services industry as a whole was unchanged today versus the S&P 500, which was unchanged. Top gainers within the Diversified Services industry included

General Employment

(

JOB

), up 4.7%,

Onvia

(

ONVI

), up 1.6%,

Spar Group

(

SGRP

), up 1.9%,

ATA

(

ATAI

), up 1.6% and

Ambassadors Group

(

EPAX

), up 3.9%.

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

Ambassadors Group

(

EPAX

) is one of the companies that pushed the Diversified Services industry higher today. Ambassadors Group was up $0.09 (3.9%) to $2.38 on light volume. Throughout the day, 1,064 shares of Ambassadors Group exchanged hands as compared to its average daily volume of 21,700 shares. The stock ranged in a price between $2.33-$2.46 after having opened the day at $2.33 as compared to the previous trading day's close of $2.29.

Ambassadors Group, Inc., an educational company, organizes and promotes worldwide educational travel programs for students and professional. The company's Ambassador Programs and Other segment offers educational travel services to students and professionals. Ambassadors Group has a market cap of $40.1 million and is part of the services sector. Shares are down 49.5% year-to-date as of the close of trading on Monday. Currently there are no analysts who rate Ambassadors Group 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 Ambassadors Group as a

sell

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

Highlights from TheStreet Ratings analysis on EPAX go as follows:

  • The gross profit margin for AMBASSADORS GROUP INC is rather low; currently it is at 24.37%. It has decreased from the same quarter the previous year. Along with this, the net profit margin of 13.98% trails that of the industry average.
  • Net operating cash flow has declined marginally to -$14.70 million or 3.82% when compared to the same quarter last year. Despite a decrease in cash flow AMBASSADORS GROUP INC is still fairing well by exceeding its industry average cash flow growth rate of -17.73%.
  • EPAX'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 45.59%, 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.
  • 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 Hotels, Restaurants & Leisure industry and the overall market, AMBASSADORS GROUP INC's return on equity significantly trails that of both the industry average and the S&P 500.
  • AMBASSADORS GROUP INC reported significant earnings per share improvement 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, AMBASSADORS GROUP INC swung to a loss, reporting -$0.45 versus $0.09 in the prior year.

You can view the full analysis from the report here:

Ambassadors Group 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.

At the close,

ATA

(

ATAI

) was up $0.06 (1.6%) to $3.92 on light volume. Throughout the day, 3,258 shares of ATA exchanged hands as compared to its average daily volume of 7,200 shares. The stock ranged in a price between $3.86-$3.95 after having opened the day at $3.88 as compared to the previous trading day's close of $3.86.

ATA Inc. provides computer-based testing services in the People's Republic of China. ATA has a market cap of $89.2 million and is part of the services sector. Shares are down 3.5% year-to-date as of the close of trading on Monday. Currently there are no analysts who rate ATA 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 ATA as a

hold

. The company's strengths can be seen in multiple areas, such as its largely solid financial position with reasonable debt levels by most measures, reasonable valuation levels and expanding profit margins. However, as a counter to these strengths, we also find weaknesses including a generally disappointing performance in the stock itself, deteriorating net income and disappointing return on equity.

Highlights from TheStreet Ratings analysis on ATAI go as follows:

  • ATAI 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 2.83, which clearly demonstrates the ability to cover short-term cash needs.
  • The gross profit margin for ATA INC -ADS is rather high; currently it is at 56.34%. 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 5.45% trails the industry average.
  • 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 Diversified Consumer Services industry. The net income has significantly decreased by 51.6% when compared to the same quarter one year ago, falling from $1.53 million to $0.74 million.
  • 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. In comparison to the other companies in the Diversified Consumer Services industry and the overall market, ATA INC -ADS's return on equity is significantly below that of the industry average and is below that of the S&P 500.

You can view the full analysis from the report here:

ATA 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.

Spar Group

(

SGRP

) was another company that pushed the Diversified Services industry higher today. Spar Group was up $0.03 (1.9%) to $1.57 on light volume. Throughout the day, 11,257 shares of Spar Group exchanged hands as compared to its average daily volume of 17,700 shares. The stock ranged in a price between $1.49-$1.61 after having opened the day at $1.56 as compared to the previous trading day's close of $1.54.

SPAR Group Inc., together with its subsidiaries, provides merchandising and other marketing services worldwide. Spar Group has a market cap of $32.9 million and is part of the services sector. Shares are down 19.2% year-to-date as of the close of trading on Monday. Currently there are no analysts who rate Spar Group a buy, no analysts rate it a sell, and none rate it a hold.

TheStreet Ratings rates Spar Group as a

hold

. 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 and notable return on equity. However, as a counter to these strengths, we also find weaknesses including weak operating cash flow, poor profit margins and a generally disappointing performance in the stock itself.

Highlights from TheStreet Ratings analysis on SGRP go as follows:

  • SGRP's revenue growth has slightly outpaced the industry average of 9.0%. Since the same quarter one year prior, revenues rose by 12.8%. This growth in revenue appears to have trickled down to the company's bottom line, improving the earnings per share.
  • The current debt-to-equity ratio, 0.39, is low and is below the industry average, implying that there has been successful management of debt levels. To add to this, SGRP has a quick ratio of 2.18, which demonstrates the ability of the company to cover short-term liquidity needs.
  • SPAR GROUP INC reported significant earnings per share improvement 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 year. During the past fiscal year, SPAR GROUP INC increased its bottom line by earning $0.15 versus $0.13 in the prior year.
  • The gross profit margin for SPAR GROUP INC is rather low; currently it is at 24.90%. Regardless of SGRP's low profit margin, it has managed to increase from the same period last year. Despite the mixed results of the gross profit margin, SGRP's net profit margin of 1.86% is significantly lower than the industry average.
  • Net operating cash flow has significantly decreased to -$1.92 million or 197.21% 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:

Spar Group 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.

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.