Alliance Data Systems Corporation (ADS): Today's Featured Diversified Services Winner

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

Alliance Data Systems Corporation ( ADS) pushed the Diversified Services industry higher today making it today's featured diversified services winner. The industry as a whole closed the day down 0.4%. By the end of trading, Alliance Data Systems Corporation rose $2.63 (1.5%) to $176.66 on heavy volume. Throughout the day, 911,934 shares of Alliance Data Systems Corporation exchanged hands as compared to its average daily volume of 487,500 shares. The stock ranged in a price between $174.28-$178.49 after having opened the day at $174.41 as compared to the previous trading day's close of $174.03. Other companies within the Diversified Services industry that increased today were: National Research Corporation ( NRCIB), up 6.8%, General Employment ( JOB), up 6.5%, 51job ( JOBS), up 5.9% and Industrial Services of America ( IDSA), up 5.7%.
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Alliance Data Systems Corporation provides marketing and loyalty solutions primarily in North America. The company operates in three segments: LoyaltyOne, Epsilon, and Private Label Services and Credit. Alliance Data Systems Corporation has a market cap of $8.7 billion and is part of the services sector. The company has a P/E ratio of 26.7, above the S&P 500 P/E ratio of 17.7. Shares are up 22.3% year to date as of the close of trading on Monday. Currently there are 11 analysts that rate Alliance Data Systems Corporation a buy, no analysts rate it a sell, and 5 rate it a hold.

TheStreet Ratings rates Alliance Data Systems Corporation as a buy. The company's strengths can be seen in multiple areas, such as its revenue growth, increase in net income, good cash flow from operations, growth in earnings per share and expanding profit margins. We feel these strengths outweigh the fact that the company has had generally high debt management risk by most measures that we evaluated.

On the negative front, Essex Rental ( ESSX), down 5.6%, Acacia Research Coroporation ( ACTG), down 5.0%, Planet Payment ( PLPM), down 4.6% and Cross Country Healthcare ( CCRN), down 4.4% , were all laggards within the diversified services industry with Fidelity National Information Services ( FIS) being today's diversified services industry laggard.

For investors not wanting singular stock exposure, 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).

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