3 Specialty Retail Stocks Pushing Industry Growth

Editor's Note: Any reference to TheStreet Ratings and its underlying recommendation does not reflect the opinion of TheStreet, Inc. or any of its contributors including Jim Cramer or Stephanie Link.

All three major indices traded up today with the Dow Jones Industrial Average ( ^DJI) trading up 12 points (0.1%) at 16,545 as of Thursday, May 22, 2014, 3:55 PM ET. The NYSE advances/declines ratio sits at 2,121 issues advancing vs. 844 declining with 178 unchanged.

The Specialty Retail industry as a whole closed the day up 0.5% versus the S&P 500, which was up 0.3%. Top gainers within the Specialty Retail industry included China Auto Logistics ( CALI), up 1.9%, Charles & Colvard ( CTHR), up 1.6%, CSS Industries ( CSS), up 5.0%, Cencosud ( CNCO), up 1.5% and America's Car-Mart ( CRMT), up 2.1%.

TheStreet Ratings Group would like to highlight 3 stocks pushing the industry higher today:

CSS Industries ( CSS) is one of the companies that pushed the Specialty Retail industry higher today. CSS Industries was up $1.17 (5.0%) to $24.51 on light volume. Throughout the day, 9,869 shares of CSS Industries exchanged hands as compared to its average daily volume of 16,800 shares. The stock ranged in a price between $23.21-$24.68 after having opened the day at $23.21 as compared to the previous trading day's close of $23.34.

CSS Industries, Inc., a consumer products company, engages in the design, manufacture, procurement, distribution, and sale of various occasion and seasonal social expression products primarily to mass market retailers primarily in the United States and Canada. CSS Industries has a market cap of $214.2 million and is part of the services sector. Shares are down 18.6% year-to-date as of the close of trading on Wednesday. Currently there are no analysts who rate CSS Industries a buy, no analysts rate it a sell, and none rate it a hold.

STOCKS TO BUY: TheStreet Quant Ratings has identified a handful of stocks that can potentially TRIPLE in the next 12 months. Learn more.

TheStreet Ratings rates CSS Industries as a buy. The company's strengths can be seen in multiple areas, such as its largely solid financial position with reasonable debt levels by most measures, attractive valuation levels, expanding profit margins and notable return on equity. We feel these strengths outweigh the fact that the company has had sub par growth in net income.

Highlights from TheStreet Ratings analysis on CSS go as follows:

  • CSS has no debt to speak of therefore resulting in a debt-to-equity ratio of zero, which we consider to be a relatively favorable sign. Along with this, the company maintains a quick ratio of 3.10, which clearly demonstrates the ability to cover short-term cash needs.
  • 35.82% is the gross profit margin for CSS INDUSTRIES INC which we consider to be strong. It has increased from the same quarter the previous year. Along with this, the net profit margin of 10.35% is above that of the industry average.
  • CSS, with its decline in revenue, underperformed when compared the industry average of 19.0%. Since the same quarter one year prior, revenues slightly dropped by 8.4%. The declining revenue appears to have seeped down to the company's bottom line, decreasing earnings per share.
  • The return on equity has improved slightly when compared to the same quarter one year prior. This can be construed as a modest strength in the organization. In comparison to the other companies in the Household Durables industry and the overall market, CSS INDUSTRIES INC's return on equity is significantly below that of the industry average and is below that of the S&P 500.

You can view the full analysis from the report here: CSS Industries Ratings Report

STOCKS TO BUY: TheStreet Quant Ratings has identified a handful of stocks that can potentially TRIPLE in the next 12 months. Learn more.

At the close, Charles & Colvard ( CTHR) was up $0.04 (1.6%) to $2.24 on light volume. Throughout the day, 110,395 shares of Charles & Colvard exchanged hands as compared to its average daily volume of 156,000 shares. The stock ranged in a price between $2.15-$2.25 after having opened the day at $2.21 as compared to the previous trading day's close of $2.21.

Charles & Colvard, Ltd. manufactures, markets, and distributes moissanite jewels and finished jewelry featuring moissanite worldwide. Charles & Colvard has a market cap of $43.4 million and is part of the services sector. Shares are down 56.2% year-to-date as of the close of trading on Wednesday. Currently there is 1 analyst who rates Charles & Colvard a buy, no analysts rate it a sell, and none rate it a hold.

STOCKS TO BUY: TheStreet Quant Ratings has identified a handful of stocks that can potentially TRIPLE in the next 12 months. Learn more.

TheStreet Ratings rates Charles & Colvard as a sell. The company's weaknesses can be seen in multiple areas, such as its deteriorating net income, disappointing return on equity, weak operating cash flow, generally disappointing historical performance in the stock itself and feeble growth in its earnings per share.

Highlights from TheStreet Ratings analysis on CTHR go as follows:

  • The company, on the basis of change in net income from the same quarter one year ago, has significantly underperformed when compared to that of the S&P 500 and the Textiles, Apparel & Luxury Goods industry. The net income has significantly decreased by 447.4% when compared to the same quarter one year ago, falling from $0.31 million to -$1.06 million.
  • Return on equity has greatly decreased when compared to its ROE from the same quarter one year prior. This is a signal of major weakness within the corporation. Compared to other companies in the Textiles, Apparel & Luxury Goods industry and the overall market, CHARLES & COLVARD LTD's return on equity significantly trails that of both the industry average and the S&P 500.
  • Net operating cash flow has significantly decreased to -$0.06 million or 107.13% when compared to the same quarter last year. In addition, when comparing to the industry average, the firm's growth rate is much lower.
  • Despite any intermediate fluctuations, we have only bad news to report on this stock's performance over the last year: it has tumbled by 38.25%, worse than the S&P 500's performance. Consistent with the plunge in the stock price, the company's earnings per share are down 350.00% compared to the year-earlier quarter. Naturally, the overall market trend is bound to be a significant factor. However, in one sense, the stock's sharp decline last year is a positive for future investors, making it cheaper (in proportion to its earnings over the past year) than most other stocks in its industry. But due to other concerns, we feel the stock is still not a good buy right now.
  • CHARLES & COLVARD LTD has experienced a steep decline in earnings per share in the most recent quarter in comparison to its performance from the same quarter a year ago. The company has reported a trend of declining earnings per share over the past two years. However, the consensus estimate suggests that this trend should reverse in the coming year. During the past fiscal year, CHARLES & COLVARD LTD swung to a loss, reporting -$0.05 versus $0.22 in the prior year. This year, the market expects an improvement in earnings ($0.01 versus -$0.05).

You can view the full analysis from the report here: Charles & Colvard Ratings Report

STOCKS TO BUY: TheStreet Quant Ratings has identified a handful of stocks that can potentially TRIPLE in the next 12 months. Learn more.

China Auto Logistics ( CALI) was another company that pushed the Specialty Retail industry higher today. China Auto Logistics was up $0.04 (1.9%) to $2.20 on light volume. Throughout the day, 6,673 shares of China Auto Logistics exchanged hands as compared to its average daily volume of 46,300 shares. The stock ranged in a price between $2.17-$2.24 after having opened the day at $2.17 as compared to the previous trading day's close of $2.16.

China Auto Logistics Inc. sells and trades in imported automobiles in the People's Republic of China. It operates in five segments: Sales of Automobiles, Financing Services, Web-Based Advertising, Automobile Value Added Services, and Auto Mall Management Services. China Auto Logistics has a market cap of $8.2 million and is part of the services sector. Shares are down 39.3% year-to-date as of the close of trading on Wednesday. Currently there are no analysts who rate China Auto Logistics a buy, no analysts rate it a sell, and none rate it a hold.

TheStreet Ratings rates China Auto Logistics as a hold. The company's strengths can be seen in multiple areas, such as its increase in net income, reasonable valuation levels and good cash flow from operations. However, as a counter to these strengths, we also find weaknesses including a generally disappointing performance in the stock itself, generally higher debt management risk and disappointing return on equity.

Highlights from TheStreet Ratings analysis on CALI go as follows:

  • The net income growth from the same quarter one year ago has significantly exceeded that of the Specialty Retail industry average, but is less than that of the S&P 500. The net income increased by 15.8% when compared to the same quarter one year prior, going from -$2.18 million to -$1.84 million.
  • CHINA AUTO LOGISTICS INC has improved earnings per share by 18.6% in the most recent quarter compared to the same quarter a year ago. This company has not demonstrated a clear trend in earnings over the past 2 years, making it difficult to accurately predict earnings for the coming year. During the past fiscal year, CHINA AUTO LOGISTICS INC reported lower earnings of $0.16 versus $0.67 in the prior year.
  • CALI's stock share price has done very poorly compared to where it was a year ago: Despite any rallies, the net result is that it is down by 32.59%, which is also worse that the performance of the S&P 500 Index. Investors have so far failed to pay much attention to the earnings improvements the company has managed to achieve over the last quarter. Despite the heavy decline in its share price, this stock is still more expensive (when compared to its current earnings) than most other companies in its industry.
  • The gross profit margin for CHINA AUTO LOGISTICS INC is currently extremely low, coming in at 1.10%. It has decreased from the same quarter the previous year. Along with this, the net profit margin of -1.58% trails that of the industry average.

You can view the full analysis from the report here: China Auto Logistics Ratings Report

STOCKS TO BUY: TheStreet Quant Ratings has identified a handful of stocks that can potentially TRIPLE in the next 12 months. Learn more.

Editor's Note: Any reference to TheStreet Ratings and its underlying recommendation does not reflect the opinion of TheStreet, Inc. or any of its contributors including Jim Cramer or Stephanie Link.

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