3 Diversified Services Stocks Dragging The Industry Down

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

All three major indices are trading up today with the Dow Jones Industrial Average ( ^DJI) trading up 3 points (0.0%) at 14,977 as of Monday, May 6, 2013, 12:49 PM ET. The NYSE advances/declines ratio sits at 1,675 issues advancing vs. 1,221 declining with 157 unchanged.

The Diversified Services industry currently sits up 0.2% versus the S&P 500, which is up 0.2%. On the negative front, top decliners within the industry include China HGS Real Estate ( HGSH), down 10.96, WEX ( WEX), down 6.58, WEX ( WXS), down 6.58, AthenaHealth ( ATHN), down 1.80 and MasterCard Incorporated ( MA), down 1.01. Top gainers within the industry include United Rentals ( URI), up 3.0%, Amerco ( UHAL), up 2.1%, Tyco International ( TYC), up 1.6% and Moody's Corporation ( MCO), up 0.7%.

TheStreet Ratings group would like to highlight 3 stocks pushing the industry lower today:

3. Paychex ( PAYX) is one of the companies pushing the Diversified Services industry lower today. As of noon trading, Paychex is down $0.36 (-1.0%) to $37.01 on average volume Thus far, 1.2 million shares of Paychex exchanged hands as compared to its average daily volume of 2.6 million shares. The stock has ranged in price between $36.96-$37.32 after having opened the day at $37.23 as compared to the previous trading day's close of $37.37.

Paychex, Inc., together with its subsidiaries, provides payroll, human resource, and benefits outsourcing solutions for small to medium-sized businesses in the United States and Germany. Paychex has a market cap of $13.4 billion and is part of the services sector. The company has a P/E ratio of 23.7, above the S&P 500 P/E ratio of 17.7. Shares are up 18.6% year to date as of the close of trading on Friday.

TheStreet Ratings rates Paychex as a buy. The company's strengths can be seen in multiple areas, such as its revenue growth, solid stock price performance, growth in earnings per share, increase in net income and expanding profit margins. Although the company may harbor some minor weaknesses, we feel they are unlikely to have a significant impact on results. Get the full Paychex Ratings Report now.

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2. As of noon trading, H&R Block ( HRB) is down $0.24 (-0.8%) to $28.38 on light volume Thus far, 971,456 shares of H&R Block exchanged hands as compared to its average daily volume of 4.0 million shares. The stock has ranged in price between $28.32-$28.62 after having opened the day at $28.56 as compared to the previous trading day's close of $28.62.

H&R Block, Inc., through its subsidiaries, engages in the provision of tax preparation and related services to the general public in the United States, Canada, and Australia. H&R Block has a market cap of $7.7 billion and is part of the services sector. The company has a P/E ratio of 24.3, above the S&P 500 P/E ratio of 17.7. Shares are up 54.1% year to date as of the close of trading on Friday.

TheStreet Ratings rates H&R Block as a hold. The company's strengths can be seen in multiple areas, such as its notable return on equity, good cash flow from operations and solid stock price performance. However, as a counter to these strengths, we also find weaknesses including unimpressive growth in net income, generally higher debt management risk and premium valuation. Get the full H&R Block Ratings Report now.

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1. As of noon trading, SBA Communications ( SBAC) is down $0.74 (-0.9%) to $78.52 on light volume Thus far, 393,726 shares of SBA Communications exchanged hands as compared to its average daily volume of 1.9 million shares. The stock has ranged in price between $78.29-$79.38 after having opened the day at $79.20 as compared to the previous trading day's close of $79.26.

SBA Communications Corporation owns and operates wireless communications towers in the United States, Canada, Costa Rica, El Salvador, Guatemala, Nicaragua, Panama, and Brazil. SBA Communications has a market cap of $10.0 billion and is part of the services sector. Shares are up 11.7% year to date as of the close of trading on Friday.

TheStreet Ratings rates SBA Communications as a hold. The company's strengths can be seen in multiple areas, such as its robust revenue growth, solid stock price performance and increase in net income. However, as a counter to these strengths, we find that the company has favored debt over equity in the management of its balance sheet. Get the full SBA Communications Ratings Report now.

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If you are interested in one of these 4 stocks, ETFs may be of interest. Investors who are bullish on the diversified services industry could consider iShares Dow Jones US Cons Services ( IYC) while those bearish on the diversified services industry 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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