5 Stocks Dragging In The Services Sector

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

Two out of the three major indices are trading lower today with the Dow Jones Industrial Average ( ^DJI) trading down 40 points (-0.3%) at 14,679 as of Wednesday, April 24, 2013, 12:55 PM ET. The NYSE advances/declines ratio sits at 1,751 issues advancing vs. 1,159 declining with 143 unchanged.

The Services sector currently sits down 0.08 versus the S&P 500, which is unchanged. On the negative front, top decliners within the sector include DeVry ( DV), down 21.10, Robert Half International ( RHI), down 11.17, Wyndham Worldwide Corporation ( WYN), down 6.32, Total System Services ( TSS), down 4.28 and Delhaize Group ( DEG), down 3.15. Top gainers within the sector include Lumber Liquidators Holdings ( LL), up 11.9%, Ryder System ( R), up 7.0%, FedEx Corporation ( FDX), up 1.6%, Magna International ( MGA), up 1.3% and McDonald's Corporation ( MCD), up 0.8%.

TheStreet Ratings group would like to highlight 5 stocks pushing the sector lower today:

5. Charter Communications ( CHTR) is one of the companies pushing the Services sector lower today. As of noon trading, Charter Communications is down $2.65 (-2.5%) to $101.76 on light volume Thus far, 259,868 shares of Charter Communications exchanged hands as compared to its average daily volume of 1.2 million shares. The stock has ranged in price between $101.76-$105.15 after having opened the day at $104.85 as compared to the previous trading day's close of $104.41.

Charter Communications, Inc., through its subsidiaries, provides entertainment, information, and communications solutions to residential and commercial customers in the United States. Charter Communications has a market cap of $10.5 billion and is part of the media industry. Shares are up 36.2% year to date as of the close of trading on Tuesday.

TheStreet Ratings rates Charter Communications as a hold. The company's strengths can be seen in multiple areas, such as its solid stock price performance, growth in earnings per share and compelling growth in net income. However, as a counter to these strengths, we also find weaknesses including generally higher debt management risk and disappointing return on equity. Get the full Charter Communications Ratings Report now.

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4. As of noon trading, Norfolk Southern Corporation ( NSC) is down $0.52 (-0.7%) to $75.32 on average volume Thus far, 1.4 million shares of Norfolk Southern Corporation exchanged hands as compared to its average daily volume of 2.3 million shares. The stock has ranged in price between $73.66-$76.25 after having opened the day at $76.11 as compared to the previous trading day's close of $75.84.

Norfolk Southern Corporation engages in the rail transportation of raw materials, intermediate products, and finished goods in the United States. Norfolk Southern Corporation has a market cap of $25.1 billion and is part of the transportation industry. The company has a P/E ratio of 14.0, below the S&P 500 P/E ratio of 17.7. Shares are up 22.6% year to date as of the close of trading on Tuesday.

TheStreet Ratings rates Norfolk Southern Corporation as a buy. The company's strengths can be seen in multiple areas, such as its attractive valuation levels, good cash flow from operations, increase in stock price during the past year, expanding profit margins and largely solid financial position with reasonable debt levels by most measures. We feel these strengths outweigh the fact that the company has had sub par growth in net income. Get the full Norfolk Southern Corporation Ratings Report now.

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3. As of noon trading, Delta Air Lines ( DAL) is down $0.20 (-1.2%) to $16.52 on average volume Thus far, 6.2 million shares of Delta Air Lines exchanged hands as compared to its average daily volume of 13.5 million shares. The stock has ranged in price between $16.32-$16.75 after having opened the day at $16.62 as compared to the previous trading day's close of $16.72.

Delta Air Lines, Inc. provides scheduled air transportation for passengers and cargo in the United States and internationally. Its route network is centered around a system of hub and international gateway airports in Amsterdam, Atlanta, Cincinnati, Detroit, Memphis, Minneapolis-St. Delta Air Lines has a market cap of $12.9 billion and is part of the transportation industry. The company has a P/E ratio of 12.7, below the S&P 500 P/E ratio of 17.7. Shares are up 40.9% year to date as of the close of trading on Tuesday.

TheStreet Ratings rates Delta Air Lines as a hold. The company's strengths can be seen in multiple areas, such as its solid stock price performance and revenue growth. However, as a counter to these strengths, we also find weaknesses including poor profit margins and weak operating cash flow. Get the full Delta Air Lines Ratings Report now.

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2. As of noon trading, Best Buy ( BBY) is down $0.44 (-1.8%) to $23.69 on light volume Thus far, 2.5 million shares of Best Buy exchanged hands as compared to its average daily volume of 12.2 million shares. The stock has ranged in price between $23.53-$24.38 after having opened the day at $24.15 as compared to the previous trading day's close of $24.13.

Best Buy Co., Inc. operates as a retailer of consumer electronics, computing and mobile phone products, entertainment products, appliances, and related services primarily in the United States, Europe, Canada, and China. Best Buy has a market cap of $8.0 billion and is part of the retail industry. The company has a P/E ratio of 8.5, below the S&P 500 P/E ratio of 17.7. Shares are up 103.6% year to date as of the close of trading on Tuesday.

TheStreet Ratings rates Best Buy as a sell. The company's weaknesses can be seen in multiple areas, such as its deteriorating net income, disappointing return on equity, poor profit margins, weak operating cash flow and generally high debt management risk. Get the full Best Buy Ratings Report now.

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1. As of noon trading, Time Warner ( TWX) is down $0.65 (-1.1%) to $59.75 on light volume Thus far, 2.1 million shares of Time Warner exchanged hands as compared to its average daily volume of 7.0 million shares. The stock has ranged in price between $59.74-$60.63 after having opened the day at $60.45 as compared to the previous trading day's close of $60.40.

Time Warner Inc. operates as a media and entertainment company in the United States and internationally. The company operates in three segments: Networks, Film and TV Entertainment, and Publishing. Time Warner has a market cap of $56.2 billion and is part of the media industry. The company has a P/E ratio of 19.5, above the S&P 500 P/E ratio of 17.7. Shares are up 26.3% year to date as of the close of trading on Tuesday.

TheStreet Ratings rates Time Warner 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, increase in net income, largely solid financial position with reasonable debt levels by most measures and expanding profit margins. We feel these strengths outweigh the fact that the company shows weak operating cash flow. Get the full Time Warner Ratings Report now.

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If you are interested in one of these 5 stocks, 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).

A reminder about TheStreet Ratings group: 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.
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