Liquidity Service Inc. (LQDT): Today's Featured Internet 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.

Liquidity Service ( LQDT) pushed the Internet industry lower today making it today's featured Internet laggard. The industry as a whole closed the day up 0.6%. By the end of trading, Liquidity Service fell $1.14 (-2.3%) to $48.66 on light volume. Throughout the day, 369,047 shares of Liquidity Service exchanged hands as compared to its average daily volume of one million shares. The stock ranged in price between $48.57-$49.73 after having opened the day at $49.54 as compared to the previous trading day's close of $49.80. Other companies within the Internet industry that declined today were: Kayak Software ( KYAK), down 3.8%, Autobytel ( ABTL), down 3.3%, Demand Media ( DMD), down 3.3%, and Bitauto Holdings ( BITA), down 3.1%.

Liquidity Services, Inc. operates various online auction marketplaces for surplus and salvage assets in the United States. Liquidity Service has a market cap of $1.37 billion and is part of the services sector. The company has a P/E ratio of 26.5, below the average retail industry P/E ratio of 31.6 and above the S&P 500 P/E ratio of 17.7. Shares are up 31.4% year to date as of the close of trading on Thursday. Currently there are seven analysts that rate Liquidity Service a buy, no analysts rate it a sell, and none rate it a hold.

TheStreet Ratings rates Liquidity Service as a buy. 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, notable return on equity, impressive record of earnings per share growth and compelling growth in net income. We feel these strengths outweigh the fact that the company shows weak operating cash flow.

For investors not wanting singular stock exposure, ETFs may be of interest. Investors who are bullish on the internet industry could consider First Trust Dow Jones Internet Idx ( FDN) while those bearish on the internet industry could consider ProShares Ultra Short Technology ( REW).
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