3 Diversified Services Stocks Driving The Industry Higher

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 are trading down today with the Dow Jones Industrial Average ( ^DJI) trading down 42.32 points (-0.3%) at 16,633 as of Wednesday, May 28, 2014, 4:20 PM ET. The NYSE advances/declines ratio sits at 1,597 issues advancing vs. 1,466 declining with 135 unchanged.

The Diversified Services industry as a whole closed the day down 0.2% versus the S&P 500, which was down 0.1%. Top gainers within the Diversified Services industry included Command Security ( MOC), up 2.3%, PDI ( PDII), up 3.4%, Versar ( VSR), up 2.7%, AeroCentury ( ACY), up 2.6% and China HGS Real Estate ( HGSH), up 2.2%.

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

Versar ( VSR) is one of the companies that pushed the Diversified Services industry higher today. Versar was up $0.09 (2.7%) to $3.40 on heavy volume. Throughout the day, 25,836 shares of Versar exchanged hands as compared to its average daily volume of 13,700 shares. The stock ranged in a price between $3.31-$3.47 after having opened the day at $3.36 as compared to the previous trading day's close of $3.31.

Versar, Inc. operates as a project management company in the United States and internationally. The company operates through three segments: Engineering and Construction Management, Environmental Services, and Professional Services. Versar has a market cap of $32.2 million and is part of the services sector. Shares are down 31.3% year-to-date as of the close of trading on Tuesday. Currently there are no analysts who rate Versar a buy, no analysts rate it a sell, and none rate it a hold.

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TheStreet Ratings rates Versar as a hold. The company's strengths can be seen in multiple areas, such as its revenue growth, largely solid financial position with reasonable debt levels by most measures and reasonable valuation levels. However, as a counter to these strengths, we also find weaknesses including feeble growth in the company's earnings per share, deteriorating net income and disappointing return on equity.

Highlights from TheStreet Ratings analysis on VSR go as follows:

  • The revenue growth came in higher than the industry average of 4.0%. Since the same quarter one year prior, revenues rose by 16.2%. This growth in revenue does not appear to have trickled down to the company's bottom line, displayed by a decline in earnings per share.
  • VSR's debt-to-equity ratio is very low at 0.06 and is currently below that of the industry average, implying that there has been very successful management of debt levels. To add to this, VSR has a quick ratio of 1.99, which demonstrates the ability of the company to cover short-term liquidity needs.
  • The gross profit margin for VERSAR INC is currently extremely low, coming in at 10.13%. It has decreased from the same quarter the previous year. Along with this, the net profit margin of 0.35% trails that of the industry average.
  • Net operating cash flow has significantly decreased to -$0.65 million or 121.65% when compared to the same quarter last year. In addition, when comparing to the industry average, the firm's growth rate is much lower.

You can view the full analysis from the report here: Versar 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, PDI ( PDII) was up $0.16 (3.4%) to $4.84 on light volume. Throughout the day, 2,637 shares of PDI exchanged hands as compared to its average daily volume of 9,400 shares. The stock ranged in a price between $4.67-$5.03 after having opened the day at $4.74 as compared to the previous trading day's close of $4.68.

PDI, Inc. provides outsourced commercial services to pharmaceutical, biotechnology, and healthcare companies in the United States. PDI has a market cap of $71.1 million and is part of the services sector. Shares are down 3.5% year-to-date as of the close of trading on Tuesday. Currently there is 1 analyst who rates PDI a buy, no analysts rate it a sell, and 1 rates 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 PDI as a sell. The company's weaknesses can be seen in multiple areas, such as its unimpressive growth in net income, poor profit margins, weak operating cash flow and feeble growth in its earnings per share.

Highlights from TheStreet Ratings analysis on PDII 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 Health Care Providers & Services industry. The net income has significantly decreased by 175.8% when compared to the same quarter one year ago, falling from $2.13 million to -$1.61 million.
  • The gross profit margin for PDI INC is rather low; currently it is at 16.98%. It has decreased from the same quarter the previous year. Along with this, the net profit margin of -4.91% trails that of the industry average.
  • Net operating cash flow has significantly decreased to -$6.46 million or 628.88% when compared to the same quarter last year. In addition, when comparing to the industry average, the firm's growth rate is much lower.
  • PDI INC 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. This company has reported somewhat volatile earnings recently. We feel it is likely to report a decline in earnings in the coming year. During the past fiscal year, PDI INC continued to lose money by earning -$0.31 versus -$1.75 in the prior year. For the next year, the market is expecting a contraction of 35.5% in earnings (-$0.42 versus -$0.31).
  • In its most recent trading session, PDII has closed at a price level that was not very different from its closing price of one year earlier. This is probably due to its weak earnings growth as well as other mixed factors. Turning our attention to the future direction of the stock, we do not believe this stock offers ample reward opportunity to compensate for the risks, despite the fact that it rose over the past year.

You can view the full analysis from the report here: PDI 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.

Command Security ( MOC) was another company that pushed the Diversified Services industry higher today. Command Security was up $0.04 (2.3%) to $1.78 on light volume. Throughout the day, 6,849 shares of Command Security exchanged hands as compared to its average daily volume of 17,900 shares. The stock ranged in a price between $1.70-$1.78 after having opened the day at $1.70 as compared to the previous trading day's close of $1.74.

Command Security Corporation provides uniformed security officers and aviation security services to commercial, financial, industrial, aviation, and governmental customers in the United States. Command Security has a market cap of $16.0 million and is part of the services sector. Shares are down 16.5% year-to-date as of the close of trading on Tuesday. Currently there are no analysts who rate Command Security a buy, no analysts rate it a sell, and none rate it a hold.

TheStreet Ratings rates Command Security as a hold. The company's strengths can be seen in multiple areas, such as its compelling growth in net income, revenue growth and largely solid financial position with reasonable debt levels by most measures. However, as a counter to these strengths, we also find weaknesses including weak operating cash flow and poor profit margins.

Highlights from TheStreet Ratings analysis on MOC go as follows:

  • The net income growth from the same quarter one year ago has significantly exceeded that of the S&P 500 and the Commercial Services & Supplies industry. The net income increased by 64.6% when compared to the same quarter one year prior, rising from $0.35 million to $0.58 million.
  • Despite its growing revenue, the company underperformed as compared with the industry average of 4.0%. Since the same quarter one year prior, revenues slightly increased by 3.9%. This growth in revenue appears to have trickled down to the company's bottom line, improving the earnings per share.
  • Compared to where it was 12 months ago, the stock is up, but it has so far lagged the appreciation in the S&P 500. Looking ahead, our view is that this company's fundamentals will not have much impact in either direction, allowing the stock to generally move up or down based on the push and pull of the broad market.
  • The gross profit margin for COMMAND SECURITY CORP is currently extremely low, coming in at 14.22%. Regardless of MOC's low profit margin, it has managed to increase from the same period last year. Despite the mixed results of the gross profit margin, the net profit margin of 1.43% trails the industry average.
  • Net operating cash flow has significantly decreased to $0.34 million or 78.45% when compared to the same quarter last year. In addition, when comparing to the industry average, the firm's growth rate is much lower.

You can view the full analysis from the report here: Command Security 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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