Dollar Tree Stores Inc. (DLTR): 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.

Dollar Tree Stores ( DLTR) pushed the Services sector lower today making it today's featured Services laggard. The sector as a whole closed the day up 0.1%. By the end of trading, Dollar Tree Stores fell 57 cents (-1.4%) to $39.82 on average volume. Throughout the day, 3.8 million shares of Dollar Tree Stores exchanged hands as compared to its average daily volume of 4.1 million shares. The stock ranged in price between $39.68-$40.64 after having opened the day at $40.64 as compared to the previous trading day's close of $40.39. Other companies within the Services sector that declined today were: TOP Ships ( TOPS), down 23.2%, FreeSeas ( FREE), down 18.5%, Bluefly ( BFLY), down 17.3%, and Ku6 Media ( KUTV), down 16.1%.
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Dollar Tree, Inc. operates discount variety stores in the United States and Canada. Its stores offer merchandise at the fixed price of $1.00. Dollar Tree Stores has a market cap of $9.21 billion and is part of the retail industry. The company has a P/E ratio of 16.4, below the S&P 500 P/E ratio of 17.7. Shares are down 2.4% year to date as of the close of trading on Thursday. Currently there are eight analysts that rate Dollar Tree Stores a buy, no analysts rate it a sell, and 10 rate it a hold.

TheStreet Ratings rates Dollar Tree Stores as a buy. The company's strengths can be seen in multiple areas, such as its revenue growth, impressive record of earnings per share growth, compelling growth in net income, notable return on equity and largely solid financial position with reasonable debt levels by most measures. We feel these strengths outweigh the fact that the company shows weak operating cash flow.

On the positive front, Good Times Restaurants ( GTIM), up 40.5%, Innovaro ( INV), up 21.1%, Grupo Casa Saba S.A.B. de C.V ( SAB), up 12.5%, and P.A.M. Transportation ( PTSI), up 12%, were all gainers within the services sector with Abercrombie & Fitch ( ANF) 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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