3 Wholesale Stocks Pushing 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 traded up today with the Dow Jones Industrial Average ( ^DJI) trading up 100 points (0.6%) at 16,838 as of Thursday, June 5, 2014, 3:55 PM ET. The NYSE advances/declines ratio sits at 2,349 issues advancing vs. 623 declining with 153 unchanged.

The Wholesale industry as a whole closed the day up 0.7% versus the S&P 500, which was up 0.6%. Top gainers within the Wholesale industry included China Auto Logistics ( CALI), up 1.8%, NL Industries ( NL), up 3.5%, Houston Wire & Cable ( HWCC), up 3.6%, Tessco Technologies ( TESS), up 2.3% and InfoSonics ( IFON), up 3.8%.

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

Houston Wire & Cable ( HWCC) is one of the companies that pushed the Wholesale industry higher today. Houston Wire & Cable was up $0.41 (3.6%) to $11.91 on light volume. Throughout the day, 52,217 shares of Houston Wire & Cable exchanged hands as compared to its average daily volume of 74,500 shares. The stock ranged in a price between $11.45-$11.97 after having opened the day at $11.49 as compared to the previous trading day's close of $11.50.

Houston Wire & Cable Company, through its subsidiaries, sells wire and cable, hardware, and related services in the United States. Houston Wire & Cable has a market cap of $204.6 million and is part of the services sector. Shares are down 14.1% year-to-date as of the close of trading on Wednesday. Currently there are no analysts who rate Houston Wire & Cable a buy, 1 analyst rates it a sell, and 2 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 Houston Wire & Cable as a buy. The company's strengths can be seen in multiple areas, such as its revenue growth and largely solid financial position with reasonable debt levels by most measures. We feel these strengths outweigh the fact that the company has had lackluster performance in the stock itself.

Highlights from TheStreet Ratings analysis on HWCC go as follows:

  • HWCC's revenue growth has slightly outpaced the industry average of 2.1%. Since the same quarter one year prior, revenues slightly increased by 6.3%. 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.
  • The current debt-to-equity ratio, 0.52, is low and is below the industry average, implying that there has been successful management of debt levels. To add to this, HWCC has a quick ratio of 2.37, which demonstrates the ability of the company to cover short-term liquidity needs.
  • HOUSTON WIRE & CABLE CO' earnings per share from the most recent quarter came in slightly below the year earlier quarter. The company has suffered a declining pattern of earnings per share over the past two years. However, we anticipate this trend to reverse over the coming year. During the past fiscal year, HOUSTON WIRE & CABLE CO reported lower earnings of $0.45 versus $0.97 in the prior year. This year, the market expects an improvement in earnings ($0.87 versus $0.45).
  • The company, on the basis of change in net income from the same quarter one year ago, has significantly underperformed against the S&P 500 and did not exceed that of the Trading Companies & Distributors industry. The net income has decreased by 3.0% when compared to the same quarter one year ago, dropping from $3.86 million to $3.75 million.
  • Reflecting the weaknesses we have cited, including the decline in the company's earnings per share, HWCC has underperformed the S&P 500 Index, declining 15.78% from its price level of one year ago. Despite the stock's decline during the last year, it is still somewhat more expensive (in proportion to its earnings over the last year) than most other stocks in its industry. We feel, however, that other strengths this company displays offset this slight negative.

You can view the full analysis from the report here: Houston Wire & Cable 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, NL Industries ( NL) was up $0.29 (3.5%) to $8.70 on light volume. Throughout the day, 9,267 shares of NL Industries exchanged hands as compared to its average daily volume of 19,700 shares. The stock ranged in a price between $8.41-$8.80 after having opened the day at $8.41 as compared to the previous trading day's close of $8.41.

NL Industries, Inc., through its subsidiary, CompX International Inc., operates in the component products industry in the United States and internationally. NL Industries has a market cap of $410.8 million and is part of the services sector. Shares are down 24.8% year-to-date as of the close of trading on Wednesday. Currently there are no analysts who rate NL Industries a buy, 1 analyst rates 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 NL Industries 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 good cash flow from operations. However, as a counter to these strengths, we also find weaknesses including disappointing return on equity, a generally disappointing performance in the stock itself and poor profit margins.

Highlights from TheStreet Ratings analysis on NL go as follows:

  • The revenue growth came in higher than the industry average of 3.8%. Since the same quarter one year prior, revenues rose by 20.2%. Growth in the company's revenue appears to have helped boost the earnings per share.
  • NL 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 3.64, which clearly demonstrates the ability to cover short-term cash needs.
  • NL INDUSTRIES reported significant earnings per share improvement in the most recent quarter compared to the same quarter a year ago. This company has reported somewhat volatile earnings recently. But, we feel it is poised for EPS growth in the coming year. During the past fiscal year, NL INDUSTRIES swung to a loss, reporting -$1.13 versus $1.16 in the prior year. This year, the market expects an improvement in earnings ($0.32 versus -$1.13).
  • NL'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 26.23%, 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.
  • 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 Commercial Services & Supplies industry and the overall market, NL INDUSTRIES's return on equity significantly trails that of both the industry average and the S&P 500.

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

China Auto Logistics ( CALI) was another company that pushed the Wholesale industry higher today. China Auto Logistics was up $0.04 (1.8%) to $2.33 on light volume. Throughout the day, 11,471 shares of China Auto Logistics exchanged hands as compared to its average daily volume of 33,200 shares. The stock ranged in a price between $2.28-$2.47 after having opened the day at $2.28 as compared to the previous trading day's close of $2.29.

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 $9.2 million and is part of the services sector. Shares are down 35.9% 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 reasonable valuation levels, good cash flow from operations and increase in net income. 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:

  • Net operating cash flow has significantly increased by 143.12% to $24.26 million when compared to the same quarter last year. In addition, CHINA AUTO LOGISTICS INC has also vastly surpassed the industry average cash flow growth rate of -8.53%.
  • The net income growth from the same quarter one year ago has 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.
  • The debt-to-equity ratio is very high at 2.37 and currently higher than the industry average, implying increased risk associated with the management of debt levels within the company. Along with the unfavorable debt-to-equity ratio, CALI maintains a poor quick ratio of 0.75, which illustrates the inability to avoid short-term cash problems.
  • The company's current return on equity has slightly decreased from the same quarter one year prior. This implies a minor weakness in the organization. Compared to other companies in the Specialty Retail industry and the overall market, CHINA AUTO LOGISTICS INC's return on equity significantly trails that of both the industry average and the S&P 500.

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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