3 Diversified Services Stocks Driving The Industry Higher

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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

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