Alliance Data Systems Corporation (ADS): Today's Featured Diversified 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.

Alliance Data Systems Corporation ( ADS) pushed the Diversified Services industry lower today making it today's featured Diversified Services laggard. The industry as a whole closed the day down 0.2%. By the end of trading, Alliance Data Systems Corporation fell $1.47 (-1.1%) to $136 on light volume. Throughout the day, 387,480 shares of Alliance Data Systems Corporation exchanged hands as compared to its average daily volume of 595,900 shares. The stock ranged in price between $134.91-$138.33 after having opened the day at $137.88 as compared to the previous trading day's close of $137.47. Other companies within the Diversified Services industry that declined today were: Swisher Hygiene ( SWSH), down 18.8%, China Yida ( CNYD), down 11.7%, Essex Rental ( ESSX), down 7.5%, and WageWorks ( WAGE), down 7.4%.

Alliance Data Systems Corporation provides data-driven and transaction-based marketing, and customer loyalty solutions primarily in the United States and Canada. Alliance Data Systems Corporation has a market cap of $6.57 billion and is part of the services sector. The company has a P/E ratio of 22, above the average diversified services industry P/E ratio of 21.3 and above the S&P 500 P/E ratio of 17.7. Shares are up 29.4% year to date as of the close of trading on Friday. Currently there are 11 analysts that rate Alliance Data Systems Corporation a buy, no analysts rate it a sell, and six rate it a hold.

TheStreet Ratings rates Alliance Data Systems Corporation as a buy. The company's strengths can be seen in multiple areas, such as its robust revenue growth, solid stock price performance, impressive record of earnings per share growth, compelling growth in net income and expanding profit margins. We feel these strengths outweigh the fact that the company shows weak operating cash flow.

On the positive front, Bioanalytical Systems ( BASI), up 25%, American Learning ( ALRN), up 19%, Hudson Technology ( HDSN), up 11.4%, and Spar Group ( SGRP), up 10%, were all gainers within the diversified services industry with H&R Block ( HRB) being today's featured diversified services industry leader.

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