3 Services Stocks Dragging The Sector 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

One out of the three major indices are trading up today with the Dow Jones Industrial Average ( ^DJI) trading down 23 points (-0.2%) at 15,060 as of Friday, May 10, 2013, 12:49 PM ET. The NYSE advances/declines ratio sits at 1,550 issues advancing vs. 1,371 declining with 121 unchanged.

The Services sector currently sits up 0.5% versus the S&P 500, which is unchanged. On the negative front, top decliners within the sector include L Brands ( LTD), down 1.88, Best Buy ( BBY), down 1.56, Western Union Company ( WU), down 1.09 and Carnival Corporation ( CCL), down 0.58. Top gainers within the sector include Liberty Media Corporation ( LMCA), up 10.4%, Advisory Board Company ( ABCO), up 9.8%, Gap ( GPS), up 5.1%, Expedia ( EXPE), up 3.9% and Sears Holdings Corporation ( SHLD), up 3.7%.

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

3. Air Lease ( AL) is one of the companies pushing the Services sector lower today. As of noon trading, Air Lease is down $1.17 (-3.8%) to $29.41 on heavy volume Thus far, 788,387 shares of Air Lease exchanged hands as compared to its average daily volume of 454,900 shares. The stock has ranged in price between $28.60-$29.90 after having opened the day at $28.90 as compared to the previous trading day's close of $30.58.

Air Lease Corporation engages in the purchase and leasing of commercial aircraft to airlines worldwide. The company also provides fleet management and remarketing services. Air Lease has a market cap of $2.9 billion and is part of the diversified services industry. The company has a P/E ratio of 23.0, above the S&P 500 P/E ratio of 17.7. Shares are up 42.2% year to date as of the close of trading on Thursday.

TheStreet Ratings rates Air Lease as a sell. Among the areas we feel are negative, one of the most important has been very high debt management risk by most measures. Get the full Air Lease Ratings Report now.

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2. As of noon trading, Companhia Brasileira De Distribuicao ( CBD) is down $0.62 (-1.1%) to $55.45 on light volume Thus far, 220,610 shares of Companhia Brasileira De Distribuicao exchanged hands as compared to its average daily volume of 593,200 shares. The stock has ranged in price between $54.87-$55.93 after having opened the day at $55.77 as compared to the previous trading day's close of $56.07.

Companhia Brasileira de Distribuic o engages in the retail of food and non-food products to individual consumers through its chain of hypermarkets, supermarkets, specialized and department stores, and e-commerce. Companhia Brasileira De Distribuicao has a market cap of $14.9 billion and is part of the retail industry. The company has a P/E ratio of 48.5, 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 Thursday.

TheStreet Ratings rates Companhia Brasileira De Distribuicao as a buy. The company's strengths can be seen in multiple areas, such as its impressive record of earnings per share growth, increase in net income, good cash flow from operations, solid stock price performance and notable return on equity. We feel these strengths outweigh the fact that the company has had generally high debt management risk by most measures that we evaluated. Get the full Companhia Brasileira De Distribuicao Ratings Report now.

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1. As of noon trading, Tyco International ( TYC) is down $0.19 (-0.6%) to $33.77 on heavy volume Thus far, 3.3 million shares of Tyco International exchanged hands as compared to its average daily volume of 3.2 million shares. The stock has ranged in price between $33.72-$34.00 after having opened the day at $33.95 as compared to the previous trading day's close of $33.96.

Tyco International Ltd. operates as a fire protection and security company. The company provides security products and services, fire protection and detection products and services, valves and controls, and other industrial products. Tyco International has a market cap of $15.7 billion and is part of the diversified services industry. Shares are up 16.1% year to date as of the close of trading on Thursday.

TheStreet Ratings rates Tyco International as a hold. The company's strengths can be seen in multiple areas, such as its revenue growth, reasonable valuation levels and good cash flow from operations. However, as a counter to these strengths, we also find weaknesses including deteriorating net income, disappointing return on equity and a generally disappointing performance in the stock itself. Get the full Tyco International 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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