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.

The Services sector as a whole closed the day down 0.2% versus the S&P 500, which was up 0.1%. Laggards within the Services sector included

Discovery Communications

(

DISCB

), down 3.0%,

Spar Group

(

SGRP

), down 5.6%,

QKL Stores

(

QKLS

), down 1.9%,

Universal Security Instruments

(

UUU

), down 3.1% and

Canterbury Park

(

CPHC

), down 3.9%.

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

QKL Stores

(

QKLS

) is one of the companies that pushed the Services sector lower today. QKL Stores was down $0.07 (1.9%) to $3.60 on light volume. Throughout the day, 1,575 shares of QKL Stores exchanged hands as compared to its average daily volume of 4,600 shares. The stock ranged in price between $3.60-$3.69 after having opened the day at $3.69 as compared to the previous trading day's close of $3.67.

QKL Stores Inc., through its subsidiaries, engages in the operation of retail chain stores in the People's Republic of China. The company's supermarkets and hypermarkets sell a selection of merchandise, including groceries, fresh food, and non-food items. QKL Stores has a market cap of $5.6 million and is part of the diversified services industry. Shares are down 12.6% year-to-date as of the close of trading on Thursday.

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TheStreet Ratings rates

QKL Stores

as a

sell

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

Highlights from TheStreet Ratings analysis on QKLS go as follows:

  • The gross profit margin for QKL STORES INC is rather low; currently it is at 16.99%. It has decreased from the same quarter the previous year. Along with this, the net profit margin of -17.12% is significantly below that of the industry average.
  • Net operating cash flow has significantly decreased to -$41.03 million or 184.97% when compared to the same quarter last year. In addition, when comparing to the industry average, the firm's growth rate is much lower.
  • QKLS has underperformed the S&P 500 Index, declining 13.95% 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.
  • QKLS's debt-to-equity ratio of 0.76 is somewhat low overall, but it is high when compared to the industry average, implying that the management of the debt levels should be evaluated further. Even though the debt-to-equity ratio shows mixed results, the company's quick ratio of 0.32 is very low and demonstrates very weak liquidity.
  • The company's current return on equity greatly increased when compared to its ROE from the same quarter one year prior. This is a signal of significant strength within the corporation. Compared to other companies in the Food & Staples Retailing industry and the overall market, QKL STORES INC'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:

QKL Stores Ratings Report

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At the close,

Spar Group

(

SGRP

) was down $0.08 (5.6%) to $1.35 on heavy volume. Throughout the day, 20,680 shares of Spar Group exchanged hands as compared to its average daily volume of 8,900 shares. The stock ranged in price between $1.30-$1.43 after having opened the day at $1.43 as compared to the previous trading day's close of $1.43.

SPAR Group Inc., together with its subsidiaries, provides merchandising and other marketing services worldwide. Spar Group has a market cap of $30.6 million and is part of the diversified services industry. Shares are down 27.8% year-to-date as of the close of trading on Thursday.

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TheStreet Ratings rates

Spar Group

as a

buy

. The company's strengths can be seen in multiple areas, such as its increase in net income, revenue growth, largely solid financial position with reasonable debt levels by most measures, attractive valuation levels and impressive record of earnings per share growth. We feel these strengths outweigh the fact that the company shows weak operating cash flow.

Highlights from TheStreet Ratings analysis on SGRP go as follows:

  • The net income growth from the same quarter one year ago has significantly exceeded that of the S&P 500 and the Media industry. The net income increased by 134.1% when compared to the same quarter one year prior, rising from $1.33 million to $3.11 million.
  • Despite its growing revenue, the company underperformed as compared with the industry average of 14.9%. Since the same quarter one year prior, revenues slightly increased by 7.6%. 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, 0.35, 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 1.57, 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 two years. However, we anticipate underperformance relative to this pattern in the coming year. During the past fiscal year, SPAR GROUP INC increased its bottom line by earning $0.15 versus $0.13 in the prior year. For the next year, the market is expecting a contraction of 80.0% in earnings ($0.03 versus $0.15).

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.

Discovery Communications

(

DISCB

) was another company that pushed the Services sector lower today. Discovery Communications was down $2.37 (3.0%) to $77.67 on heavy volume. Throughout the day, 200 shares of Discovery Communications exchanged hands as compared to its average daily volume of 100 shares. The stock ranged in price between $77.67-$78.95 after having opened the day at $78.95 as compared to the previous trading day's close of $80.04.

Discovery Communications, Inc. operates as a media company worldwide. The company operates in three segments: U.S. Networks, International Networks, and Education. Discovery Communications has a market cap of $518.1 million and is part of the diversified services industry. Shares are down 10.7% year-to-date as of the close of trading on Thursday. Currently there is 1 analyst who rates Discovery Communications a buy, no analysts rate it a sell, and none rate it a hold.

TheStreet Ratings rates

Discovery Communications

as a

buy

. The company's strengths can be seen in multiple areas, such as its robust revenue growth, notable return on equity, expanding profit margins, good cash flow from operations and growth in earnings per share. We feel these strengths outweigh the fact that the company has had lackluster performance in the stock itself.

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Highlights from TheStreet Ratings analysis on DISCB go as follows:

  • DISCB's revenue growth has slightly outpaced the industry average of 14.9%. Since the same quarter one year prior, revenues rose by 22.1%. This growth in revenue appears to have trickled down to the company's bottom line, improving the earnings per share.
  • 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 Media industry and the overall market, DISCOVERY COMMUNICATIONS INC's return on equity exceeds that of both the industry average and the S&P 500.
  • The gross profit margin for DISCOVERY COMMUNICATIONS INC is currently very high, coming in at 90.64%. It has increased from the same quarter the previous year. Along with this, the net profit margin of 16.30% is above that of the industry average.
  • Net operating cash flow has significantly increased by 83.96% to $241.00 million when compared to the same quarter last year. In addition, DISCOVERY COMMUNICATIONS INC has also vastly surpassed the industry average cash flow growth rate of 6.21%.
  • DISCOVERY COMMUNICATIONS INC's earnings per share improvement from the most recent quarter was slightly positive. The company has demonstrated a pattern of positive earnings per share growth over the past two years. We feel that this trend should continue. During the past fiscal year, DISCOVERY COMMUNICATIONS INC increased its bottom line by earning $2.97 versus $2.52 in the prior year. This year, the market expects an improvement in earnings ($11.02 versus $2.97).

You can view the full analysis from the report here:

Discovery Communications 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.