Guess Inc. (GES): Today's Featured Services Laggard

Editor's Note: TheStreet ratings do not represent the views of TheStreet's staff or its contributors. Ratings are established by computer based on metrics for performance (which includes growth, stock performance, efficiency and valuation) and risk (volatility and solvency). Companies with poor cash flow or high debt levels tend to earn lower ratings in our model.

Guess ( GES) pushed the Services sector lower today making it today's featured Services laggard. The sector as a whole closed the day up 0.7%. By the end of trading, Guess fell 33 cents (-1%) to $32.50 on average volume. Throughout the day, 1.4 million shares of Guess exchanged hands as compared to its average daily volume of 1.7 million shares. The stock ranged in price between $32.45-$33.36 after having opened the day at $32.89 as compared to the previous trading day's close of $32.83. Other companies within the Services sector that declined today were: Innovaro ( INV), down 19.1%, Bioanalytical Systems ( BASI), down 14.4%, LodgeNet Interactive Corporation ( LNET), down 13.6%, and DLH Holdings ( DLHC), down 13.5%.

Guess , Inc. designs, markets, distributes, and licenses lifestyle collections of contemporary apparel and accessories for men, women, and children that reflect the American lifestyle and European fashion sensibilities. Guess has a market cap of $2.79 billion and is part of the retail industry. The company has a P/E ratio of 12, above the average retail industry P/E ratio of 11.5 and below the S&P 500 P/E ratio of 17.7. Shares are up 5.9% year to date as of the close of trading on Thursday. Currently there are four analysts that rate Guess a buy, one analyst rates it a sell, and five rate it a hold.

TheStreet Ratings rates Guess as a buy. 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, expanding profit margins and notable return on equity. We feel these strengths outweigh the fact that the company has had somewhat weak growth in earnings per share.

On the positive front, Checkpoint Systems ( CKP), up 21.5%, Ann ( ANN), up 20.4%, iParty Corporation ( IPT), up 17.5%, and Scientific Learning Corporation ( SCIL), up 14.9%, were all gainers within the services sector with AutoZone ( AZO) being today's featured services sector leader.

For investors not wanting singular stock exposure, ETFs may be of interest. Investors who are bullish on the services sector could consider iShares Dow Jones US Cons Services ( IYC) while those bearish on the services sector could consider ProShares Ultra Short Consumer Sers ( SCC).
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