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 1.6% versus the S&P 500, which was down 1.3%. Laggards within the Services sector included

Discovery Communications

(

DISCB

), down 9.1%,

QKL Stores

(

QKLS

), down 1.9%,

Wilhelmina International

(

WHLM

), down 1.6%,

Acorn International

(

ATV

), down 15.4% and

China Yida

(

CNYD

), down 3.5%.

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

Wilhelmina International

(

WHLM

) is one of the companies that pushed the Services sector lower today. Wilhelmina International was down $0.09 (1.6%) to $5.64 on average volume. Throughout the day, 1,271 shares of Wilhelmina International exchanged hands as compared to its average daily volume of 1,200 shares. The stock ranged in price between $5.63-$5.64 after having opened the day at $5.64 as compared to the previous trading day's close of $5.73.

Wilhelmina International has a market cap of $33.6 million and is part of the wholesale industry. Shares are down 4.5% year-to-date as of the close of trading on Thursday.

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At the close,

QKL Stores

(

QKLS

) was down $0.04 (1.9%) to $2.07 on light volume. Throughout the day, 500 shares of QKL Stores exchanged hands as compared to its average daily volume of 2,500 shares. The stock ranged in price between $2.07-$2.16 after having opened the day at $2.16 as compared to the previous trading day's close of $2.11.

QKL Stores Inc., together with its subsidiaries, operates a supermarket chain in northeastern China and Inner Mongolia. QKL Stores has a market cap of $3.3 million and is part of the wholesale industry. Shares are up 8.2% 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 unimpressive growth in net income, generally high debt management risk, disappointing return on equity, poor profit margins and weak operating cash flow.

Highlights from TheStreet Ratings analysis on QKLS 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 Food & Staples Retailing industry. The net income has significantly decreased by 223.9% when compared to the same quarter one year ago, falling from -$1.69 million to -$5.48 million.
  • The debt-to-equity ratio of 1.45 is relatively high when compared with the industry average, suggesting a need for better debt level management. To add to this, QKLS has a quick ratio of 0.52, this demonstrates the lack of ability of the company to cover short-term liquidity needs.
  • Current return on equity is lower than its ROE from the same quarter one year prior. This is a clear sign of weakness within the company. 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.
  • The gross profit margin for QKL STORES INC is rather low; currently it is at 16.80%. It has decreased from the same quarter the previous year. Along with this, the net profit margin of -8.96% is significantly below that of the industry average.
  • Net operating cash flow has declined marginally to -$3.29 million or 3.71% 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:

QKL Stores Ratings Report

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Discovery Communications

(

DISCB

) was another company that pushed the Services sector lower today. Discovery Communications was down $2.82 (9.1%) to $28.08 on heavy volume. Throughout the day, 167 shares of Discovery Communications exchanged hands as compared to its average daily volume of 100 shares. The stock ranged in price between $28.08-$28.08 after having opened the day at $28.08 as compared to the previous trading day's close of $30.90.

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 $202.2 million and is part of the wholesale industry. Shares are down 16.5% year-to-date as of the close of trading on Thursday. Currently there are no analysts who rate Discovery Communications a buy, no analysts rate it a sell, and 1 rates it a hold.

TheStreet Ratings rates

Discovery Communications

as a

buy

. The company's strengths can be seen in multiple areas, such as its revenue growth, notable return on equity, reasonable valuation levels, impressive record of earnings per share growth and expanding profit margins. We feel these strengths outweigh the fact that the company shows weak operating cash flow.

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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 8.4%. Since the same quarter one year prior, revenues rose by 14.0%. 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.
  • DISCOVERY COMMUNICATIONS INC has improved earnings per share by 17.1% in the most recent quarter compared to the same quarter a year ago. This company has reported somewhat volatile earnings recently. But, we feel it is poised for EPS growth in the coming year. During the past fiscal year, DISCOVERY COMMUNICATIONS INC reported lower earnings of $2.05 versus $2.52 in the prior year. This year, the market expects an improvement in earnings ($5.03 versus $2.05).
  • The gross profit margin for DISCOVERY COMMUNICATIONS INC is currently very high, coming in at 89.99%. Regardless of DISCB's high profit margin, it has managed to decrease from the same period last year. Despite the mixed results of the gross profit margin, DISCB's net profit margin of 17.85% compares favorably to the industry average.

You can view the full analysis from the report here:

Discovery Communications Ratings Report

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