Safeway Inc. (SWY): Today's Featured Services Winner

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.

Safeway ( SWY) pushed the Services sector higher today making it today's featured services winner. The sector as a whole closed the day down 0.9%. By the end of trading, Safeway rose 27 cents (1.6%) to $16.83 on average volume. Throughout the day, 5.5 million shares of Safeway exchanged hands as compared to its average daily volume of 6.3 million shares. The stock ranged in a price between $16.49-$16.87 after having opened the day at $16.63 as compared to the previous trading day's close of $16.56. Other companies within the Services sector that increased today were: Big five Sporting Goods Corporation ( BGFV), up 34.8%, HHGregg Incorporated ( HGG), up 18.9%, Overseas Shipholding Group ( OSG), up 17.8%, and Mecox Lane ( MCOX), up 13.3%.
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Safeway Inc., together with its subsidiaries, operates as a food and drug retailer in North America. Safeway has a market cap of $3.91 billion and is part of the retail industry. The company has a P/E ratio of 8.7, below the S&P 500 P/E ratio of 17.7. Shares are down 22.5% year to date as of the close of trading on Thursday. Currently there are five analysts that rate Safeway a buy, four analysts rate it a sell, and eight rate it a hold.

TheStreet Ratings rates Safeway as a hold. The company's strengths can be seen in multiple areas, such as its increase in net income, attractive valuation levels and impressive record of earnings per share growth. However, as a counter to these strengths, we also find weaknesses including generally higher debt management risk, poor profit margins and weak operating cash flow.

On the negative front, China HGS Real Estate ( HGSH), down 17%, PDI ( PDII), down 15.3%, KIT Digital ( KITD), down 14.2%, and Dolan ( DM), down 13.8%, were all laggards within the services sector with TJX Companies ( TJX) being today's services sector laggard.

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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