Family Dollar Stores Inc. (FDO): 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

Family Dollar Stores ( FDO) pushed the Services sector lower today making it today's featured Services laggard. The sector as a whole closed the day up 0.5%. By the end of trading, Family Dollar Stores fell $0.67 (-1.1%) to $61.37 on average volume. Throughout the day, 1,515,323 shares of Family Dollar Stores exchanged hands as compared to its average daily volume of 1,757,500 shares. The stock ranged in price between $60.61-$62.25 after having opened the day at $62.10 as compared to the previous trading day's close of $62.04. Other companies within the Services sector that declined today were: Mecox Lane ( MCOX), down 15.1%, DLH Holdings ( DLHC), down 14.7%, NTN Buzztime ( NTN), down 9.9% and Arkansas Best Corporation ( ABFS), down 9.0%.
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Family Dollar Stores, Inc. operates a chain of self-service retail discount stores primarily for low- and middle-income consumers in the United States. Family Dollar Stores has a market cap of $7.3 billion and is part of the retail industry. The company has a P/E ratio of 17.2, below the S&P 500 P/E ratio of 17.7. Shares are down 0.7% year to date as of the close of trading on Monday.

TheStreet Ratings rates Family Dollar Stores as a buy. The company's strengths can be seen in multiple areas, such as its revenue growth, growth in earnings per share, increase in net income, largely solid financial position with reasonable debt levels by most measures and attractive valuation levels. We feel these strengths outweigh the fact that the company has had lackluster performance in the stock itself.

On the positive front, Multimedia Games ( MGAM), down 22.2%, China HGS Real Estate ( HGSH), down 16.6%, Wesco Aircraft Holdings ( WAIR), down 11.8% and Document Security Systems ( DSS), down 10.9% , were all gainers within the services sector with Michael Kors Holdings ( KORS) 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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