Macy's Inc (M): 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.

Macy's ( M) pushed the Services sector lower today making it today's featured Services laggard. The sector as a whole closed the day down 0.3%. By the end of trading, Macy's fell 63 cents (-1.6%) to $39 on light volume. Throughout the day, 3.4 million shares of Macy's exchanged hands as compared to its average daily volume of 5.5 million shares. The stock ranged in price between $38.99-$39.71 after having opened the day at $39.59 as compared to the previous trading day's close of $39.63. Other companies within the Services sector that declined today were: ENGlobal Corporation ( ENG), down 27.8%, CIBT Education Group ( MBA), down 17.7%, Sport Chalet ( SPCHB), down 12.5%, and WidePoint Corporation ( WYY), down 7.9%.
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Macy's, Inc., together with its subsidiaries, operates stores and Internet Websites in the United States. Its retail stores and Internet Web sites sell a range of merchandise, including apparel and accessories for men, women, and children; cosmetics; home furnishings; and other consumer goods. Macy's has a market cap of $15.82 billion and is part of the retail industry. The company has a P/E ratio of 12.5, equal to the average retail industry P/E ratio and below the S&P 500 P/E ratio of 17.7. Shares are up 23.2% year to date as of the close of trading on Tuesday. Currently there are 10 analysts that rate Macy's a buy, no analysts rate it a sell, and four rate it a hold.

TheStreet Ratings rates Macy's as a buy. The company's strengths can be seen in multiple areas, such as its revenue growth, notable return on equity, attractive valuation levels, expanding profit margins and solid stock price performance. We feel these strengths outweigh the fact that the company has had generally high debt management risk by most measures that we evaluated.

On the positive front, General Employment ( JOB), up 13%, iParty Corporation ( IPT), up 10.4%, Barnes & Noble ( BKS), up 8.2%, and Yum Brands ( YUM), up 8%, were all gainers within the services sector with Liberty Media Corporation ( LMCA) 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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