3 Stocks Improving Performance Of The Services Sector

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.

Two out of the three major indices traded up today The three major indices are trading lower today with the Dow Jones Industrial Average ( ^DJI) trading up 8 points (0.1%) at 16,707 as of Friday, May 30, 2014, 3:55 PM ET. The NYSE advances/declines ratio sits at 1,211 issues advancing vs. 1,772 declining with 147 unchanged.

The Services sector as a whole closed the day down 0.2% versus the S&P 500, which was up 0.1%. Top gainers within the Services sector included Birks Group ( BGI), up 1.7%, China Yida ( CNYD), up 5.4%, VirtualScopics ( VSCP), up 3.8%, RLJ Entertainment ( RLJE), up 5.3% and Point 360 ( PTSX), up 3.4%.

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

RLJ Entertainment ( RLJE) is one of the companies that pushed the Services sector higher today. RLJ Entertainment was up $0.19 (5.3%) to $3.80 on light volume. Throughout the day, 1,902 shares of RLJ Entertainment exchanged hands as compared to its average daily volume of 6,700 shares. The stock ranged in a price between $3.78-$3.82 after having opened the day at $3.78 as compared to the previous trading day's close of $3.61.

RLJ Entertainment, Inc., an entertainment company, acquires content rights in British episodic mystery and drama, urban programming, and full-length motion pictures. It operates through three segments: Intellectual Property Licensing, Wholesale, and Direct-to-Consumer. RLJ Entertainment has a market cap of $48.3 million and is part of the leisure industry. Shares are down 24.6% year-to-date as of the close of trading on Thursday. Currently there are no analysts who rate RLJ Entertainment 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 RLJ Entertainment as a sell. The company's weaknesses can be seen in multiple areas, such as its disappointing return on equity, poor profit margins and generally disappointing historical performance in the stock itself.

Highlights from TheStreet Ratings analysis on RLJE go as follows:

  • 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 Media industry and the overall market, RLJ ENTERTAINMENT INC's return on equity significantly trails that of both the industry average and the S&P 500.
  • The gross profit margin for RLJ ENTERTAINMENT INC is rather low; currently it is at 23.47%. It has decreased from the same quarter the previous year. Along with this, the net profit margin of -3.59% is significantly below that of the industry average.
  • RLJE has underperformed the S&P 500 Index, declining 11.67% from its price level of one year ago. The fact that the stock is now selling for less than others in its industry in relation to its current earnings is not reason enough to justify a buy rating at this time.
  • RLJ ENTERTAINMENT INC has improved earnings per share by 44.0% 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, RLJ ENTERTAINMENT INC reported poor results of -$2.30 versus -$0.49 in the prior year.
  • RLJE, with its decline in revenue, underperformed when compared the industry average of 14.9%. Since the same quarter one year prior, revenues slightly dropped by 4.0%. The declining revenue has not hurt the company's bottom line, with increasing earnings per share.

You can view the full analysis from the report here: RLJ Entertainment 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, VirtualScopics ( VSCP) was up $0.15 (3.8%) to $4.15 on heavy volume. Throughout the day, 7,897 shares of VirtualScopics exchanged hands as compared to its average daily volume of 4,200 shares. The stock ranged in a price between $3.99-$4.20 after having opened the day at $4.00 as compared to the previous trading day's close of $4.00.

VirtualScopics, Inc. provides imaging solutions for the pharmaceutical, biotechnology, and medical device industries. VirtualScopics has a market cap of $11.8 million and is part of the leisure industry. Shares are up 15.6% year-to-date as of the close of trading on Thursday. Currently there is 1 analyst who rates VirtualScopics 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 VirtualScopics as a sell. The company's weaknesses can be seen in multiple areas, such as its poor profit margins and generally disappointing historical performance in the stock itself.

Highlights from TheStreet Ratings analysis on VSCP go as follows:

  • The gross profit margin for VIRTUALSCOPICS INC is currently lower than what is desirable, coming in at 32.24%. Regardless of VSCP's low profit margin, it has managed to increase from the same period last year. Despite the mixed results of the gross profit margin, VSCP's net profit margin of -27.44% significantly underperformed when compared to the industry average.
  • VSCP'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 32.38%, 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. 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.
  • Current return on equity exceeded its ROE from the same quarter one year prior. This is a clear sign of strength within the company. Compared to other companies in the Life Sciences Tools & Services industry and the overall market, VIRTUALSCOPICS INC's return on equity significantly trails that of both the industry average and the S&P 500.
  • VSCP, with its decline in revenue, underperformed when compared the industry average of 19.3%. Since the same quarter one year prior, revenues slightly dropped by 7.1%. The declining revenue has not hurt the company's bottom line, with increasing earnings per share.
  • The net income growth from the same quarter one year ago has exceeded that of the S&P 500, but is less than that of the Life Sciences Tools & Services industry average. The net income increased by 42.0% when compared to the same quarter one year prior, rising from -$1.11 million to -$0.65 million.

You can view the full analysis from the report here: VirtualScopics 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 Yida ( CNYD) was another company that pushed the Services sector higher today. China Yida was up $0.17 (5.4%) to $3.30 on heavy volume. Throughout the day, 11,250 shares of China Yida exchanged hands as compared to its average daily volume of 4,600 shares. The stock ranged in a price between $3.15-$3.30 after having opened the day at $3.15 as compared to the previous trading day's close of $3.13.

China Yida Holding Co., together with its subsidiaries, engages in the tourism and advertisement businesses in the People's Republic of China. China Yida has a market cap of $12.3 million and is part of the leisure industry. Shares are up 8.7% year-to-date as of the close of trading on Thursday. Currently there are no analysts who rate China Yida a buy, no analysts rate it a sell, and none rate it a hold.

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

Highlights from TheStreet Ratings analysis on CNYD go as follows:

  • CHINA YIDA HOLDING CO 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. During the past fiscal year, CHINA YIDA HOLDING CO swung to a loss, reporting -$4.38 versus $0.06 in the prior year.
  • 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 Media industry. The net income has significantly decreased by 328.0% when compared to the same quarter one year ago, falling from -$1.54 million to -$6.60 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 Media industry and the overall market, CHINA YIDA HOLDING CO'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 -$0.11 million or 118.99% 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 35.17%, worse than the S&P 500's performance. Consistent with the plunge in the stock price, the company's earnings per share are down 397.05% compared to the year-earlier quarter. Turning toward the future, the fact that the stock has come down in price over the past year should not necessarily be interpreted as a negative; it could be one of the factors that may help make the stock attractive down the road. Right now, however, we believe that it is too soon to buy.

You can view the full analysis from the report here: China Yida 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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