Ross Stores Inc. (ROST): 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.

Ross Stores ( ROST) pushed the Services sector lower today making it today's featured Services laggard. The sector as a whole closed the day up 0.4%. By the end of trading, Ross Stores fell $4.47 (-7.5%) to $55.23 on heavy volume. Throughout the day, 9.6 million shares of Ross Stores exchanged hands as compared to its average daily volume of 2.3 million shares. The stock ranged in price between $54.86-$59.61 after having opened the day at $59.61 as compared to the previous trading day's close of $59.70. Other companies within the Services sector that declined today were: China Lodging Group ( HTHT), down 14.3%, Fortune Industries ( FFI), down 14.2%, Innotrac Corporation ( INOC), down 10.9%, and YY Inc ADR ( YY), down 9.9%.
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Ross Stores, Inc., together with its subsidiaries, operates off-price retail apparel and home fashion stores under the Ross Dress for Less and dd's DISCOUNTS brand names in the United States. Ross Stores has a market cap of $13.2 billion and is part of the retail industry. The company has a P/E ratio of 17.9, above the S&P 500 P/E ratio of 17.7. Shares are up 9.7% year to date as of the close of trading on Wednesday. Currently there are 11 analysts that rate Ross Stores a buy, no analysts rate it a sell, and 10 rate it a hold.

TheStreet Ratings rates Ross Stores as a buy. The company's strengths can be seen in multiple areas, such as its solid stock price performance, growth in earnings per share, revenue growth, 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, Hot Topic ( HOTT), up 29%, FreeSeas ( FREE), up 25.8%, ValueVision Media ( VVTV), up 15.8%, and Trans World Entertainment ( TWMC), up 13.6%, were all gainers within the services sector with Sears Holdings Corporation ( SHLD) 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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