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

Alliance Data Systems Corporation ( ADS) pushed the Diversified Services industry lower today making it today's featured Diversified Services laggard. The industry as a whole closed the day down 0.8%. By the end of trading, Alliance Data Systems Corporation fell $2.56 (-1.4%) to $177.79 on average volume. Throughout the day, 560,468 shares of Alliance Data Systems Corporation exchanged hands as compared to its average daily volume of 562,300 shares. The stock ranged in price between $177.12-$181.00 after having opened the day at $179.54 as compared to the previous trading day's close of $180.35. Other companies within the Diversified Services industry that declined today were: UniTek Global Services ( UNTK), down 14.5%, Myriad Genetics ( MYGN), down 13.8%, DLH Holdings ( DLHC), down 12.4% and VirtualScopics ( VSCP), down 7.2%.
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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 $8.8 billion and is part of the services sector. The company has a P/E ratio of 26.9, above the S&P 500 P/E ratio of 17.7. Shares are up 24.6% year to date as of the close of trading on Thursday. Currently there are 12 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 positive front, China Distance Education Holdings ( DL), down 11.3%, Taomee Holdings ( TAOM), down 7.2%, NutriSystem ( NTRI), down 6.9% and ATA ( ATAI), down 3.7% , were all gainers within the diversified services industry with URS Corporation ( URS) being today's featured diversified services industry leader.

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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