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The Services sector as a whole closed the day down 1.2% versus the S&P 500, which was down 0.8%. Laggards within the Services sector included

Onvia

(

ONVI

), down 4.8%,

Alon Blue Square Israel

(

BSI

), down 3.4%,

Discovery Communications

(

DISCB

), down 9.5%,

Compx International

(

CIX

TheStreet Recommends

), down 6.2% and

Gray Television

(

GTN.A

), down 12.8%.

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

Shutterstock

(

SSTK

) is one of the companies that pushed the Services sector lower today. Shutterstock was down $16.33 (32.2%) to $34.42 on heavy volume. Throughout the day, 5,131,992 shares of Shutterstock exchanged hands as compared to its average daily volume of 414,600 shares. The stock ranged in price between $32.20-$41.00 after having opened the day at $37.31 as compared to the previous trading day's close of $50.75.

Shutterstock, Inc. operates as an online marketplace for commercial digital content imagery. Shutterstock has a market cap of $1.8 billion and is part of the diversified services industry. Shares are down 26.6% year-to-date as of the close of trading on Wednesday. Currently there are 4 analysts who rate Shutterstock a buy, no analysts rate it a sell, and 1 rates it a hold.

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TheStreet Ratings rates

Shutterstock

as a

hold

. 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 and good cash flow from operations. 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 SSTK go as follows:

  • The revenue growth came in higher than the industry average of 6.2%. Since the same quarter one year prior, revenues rose by 34.0%. This growth in revenue does not appear to have trickled down to the company's bottom line, displayed by a decline in earnings per share.
  • SSTK 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. To add to this, SSTK has a quick ratio of 1.92, which demonstrates the ability of the company to cover short-term liquidity needs.
  • The gross profit margin for SHUTTERSTOCK INC is rather high; currently it is at 60.93%. Regardless of SSTK's high profit margin, it has managed to decrease from the same period last year. Despite the mixed results of the gross profit margin, SSTK's net profit margin of 3.32% is significantly lower than the industry average.
  • 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. When compared to other companies in the Internet Software & Services industry and the overall market, SHUTTERSTOCK INC's return on equity is below that of both the industry average and the S&P 500.
  • Despite any intermediate fluctuations, we have only bad news to report on this stock's performance over the last year: it has tumbled by 35.45%, worse than the S&P 500's performance. Consistent with the plunge in the stock price, the company's earnings per share are down 35.71% compared to the year-earlier quarter. Although its share price is down sharply from a year ago, do not assume that it can now be tagged as cheap and attractive. The reality is that, based on its current price in relation to its earnings, SSTK is still more expensive than most of the other companies in its industry.

You can view the full analysis from the report here:

Shutterstock Ratings Report

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At the close,

Compx International

(

CIX

) was down $0.74 (6.2%) to $11.16 on heavy volume. Throughout the day, 2,085 shares of Compx International exchanged hands as compared to its average daily volume of 600 shares. The stock ranged in price between $11.16-$11.91 after having opened the day at $11.91 as compared to the previous trading day's close of $11.90.

CompX International Inc. engages in the manufacture and sale of security products and recreational marine components primarily in North America. The company operates through two segments, Security Products and Marine Components. Compx International has a market cap of $28.6 million and is part of the diversified services industry. Shares are down 1.6% year-to-date as of the close of trading on Wednesday.

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TheStreet Ratings rates

Compx International

as a

buy

. 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, increase in stock price during the past year, growth in earnings per share and increase in net income. We feel its strengths outweigh the fact that the company shows weak operating cash flow.

Highlights from TheStreet Ratings analysis on CIX go as follows:

  • The revenue growth came in higher than the industry average of 3.6%. Since the same quarter one year prior, revenues slightly increased by 8.2%. This growth in revenue appears to have trickled down to the company's bottom line, improving the earnings per share.
  • CIX 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 5.13, 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. Turning our attention to the future direction of the stock, it goes without saying that even the best stocks can fall in an overall down market. However, in any other environment, this stock still has good upside potential despite the fact that it has already risen in the past year.
  • COMPX INTERNATIONAL INC has improved earnings per share by 11.8% 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. During the past fiscal year, COMPX INTERNATIONAL INC increased its bottom line by earning $0.70 versus $0.49 in the prior year.
  • The company, on the basis of net income growth from the same quarter one year ago, has significantly outperformed against the S&P 500 and exceeded that of the Commercial Services & Supplies industry average. The net income increased by 12.8% when compared to the same quarter one year prior, going from $2.14 million to $2.41 million.

You can view the full analysis from the report here:

Compx International Ratings Report

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Discovery Communications

(

DISCB

) was another company that pushed the Services sector lower today. Discovery Communications was down $2.98 (9.5%) to $28.35 on average volume. Throughout the day, 200 shares of Discovery Communications exchanged hands as compared to its average daily volume of 200 shares. The stock ranged in price between $28.35-$28.51 after having opened the day at $28.51 as compared to the previous trading day's close of $31.33.

Discovery Communications, Inc. operates as a media company. The company operates through U.S. Networks; International Networks; and Education and Other segments. Discovery Communications has a market cap of $217.7 million and is part of the diversified services industry. Shares are down 15.4% year-to-date as of the close of trading on Wednesday. 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, increase in net income, notable return on equity, attractive valuation levels and expanding profit margins. We feel its 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 6.7%. Since the same quarter one year prior, revenues slightly increased by 8.9%. This growth in revenue does not appear to have trickled down to the company's bottom line, displayed by a decline in 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 company, on the basis of net income growth from the same quarter one year ago, has significantly outperformed against the S&P 500 and exceeded that of the Media industry average. The net income increased by 8.7% when compared to the same quarter one year prior, going from $230.00 million to $250.00 million.
  • The gross profit margin for DISCOVERY COMMUNICATIONS INC is currently very high, coming in at 89.46%. 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 16.26% compares favorably to the industry average.

You can view the full analysis from the report here:

Discovery Communications Ratings Report

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