3 Stocks Moving The Retail Industry Upward

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 67 points (0.4%) at 16,903 as of Friday, June 6, 2014, 3:55 PM ET. The NYSE advances/declines ratio sits at 2,246 issues advancing vs. 764 declining with 128 unchanged.

The Retail industry as a whole closed the day up 0.9% versus the S&P 500, which was up 0.3%. Top gainers within the Retail industry included China Nepstar Chain Drugstore ( NPD), up 2.1%, Cache ( CACH), up 5.7%, dELiA*s ( DLIA), up 3.1%, Gordman's Stores ( GMAN), up 3.6% and Body Central ( BODY), up 7.5%.

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

dELiA*s ( DLIA) is one of the companies that pushed the Retail industry higher today. dELiA*s was up $0.02 (3.1%) to $0.65 on light volume. Throughout the day, 428,145 shares of dELiA*s exchanged hands as compared to its average daily volume of 691,000 shares. The stock ranged in a price between $0.62-$0.66 after having opened the day at $0.63 as compared to the previous trading day's close of $0.63.

dELiA*s, Inc. operates as a multi-channel retail company, primarily marketing to teenage girls in the United States. The company sells various product categories to consumers through its Website, direct mail catalogs, and retail stores. dELiA*s has a market cap of $43.2 million and is part of the services sector. Shares are down 28.4% year-to-date as of the close of trading on Thursday. Currently there are no analysts who rate dELiA*s a buy, no analysts rate it a sell, and none rate it a hold.

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TheStreet Ratings rates dELiA*s as a sell. The company's weaknesses can be seen in multiple areas, such as its deteriorating net income, generally high debt management risk, disappointing return on equity, poor profit margins and weak operating cash flow.

Highlights from TheStreet Ratings analysis on DLIA 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 Internet & Catalog Retail industry. The net income has significantly decreased by 26.0% when compared to the same quarter one year ago, falling from -$9.22 million to -$11.61 million.
  • The debt-to-equity ratio of 1.25 is relatively high when compared with the industry average, suggesting a need for better debt level management. To add to this, DLIA has a quick ratio of 0.57, this demonstrates the lack of ability of the company to cover short-term liquidity needs.
  • 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 Internet & Catalog Retail industry and the overall market, DELIAS INC's return on equity significantly trails that of both the industry average and the S&P 500.
  • The gross profit margin for DELIAS INC is currently lower than what is desirable, coming in at 27.59%. It has decreased from the same quarter the previous year. Along with this, the net profit margin of -44.78% is significantly below that of the industry average.
  • Net operating cash flow has declined marginally to -$14.91 million or 4.19% when compared to the same quarter last year. In addition, when comparing the cash generation rate to the industry average, the firm's growth is significantly lower.

You can view the full analysis from the report here: dELiA*s Ratings Report

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At the close, Cache ( CACH) was up $0.09 (5.7%) to $1.62 on heavy volume. Throughout the day, 419,311 shares of Cache exchanged hands as compared to its average daily volume of 276,600 shares. The stock ranged in a price between $1.53-$1.75 after having opened the day at $1.53 as compared to the previous trading day's close of $1.53.

Cache, Inc., together with its subsidiaries, operates as a mall-based and online woman's specialty retailer of apparel and accessories in the United States. Cache has a market cap of $36.4 million and is part of the services sector. Shares are down 69.4% year-to-date as of the close of trading on Thursday. Currently there are 2 analysts who rate Cache 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 Cache as a sell. The company's weaknesses can be seen in multiple areas, such as its generally high debt management risk, disappointing return on equity, poor profit margins and generally disappointing historical performance in the stock itself.

Highlights from TheStreet Ratings analysis on CACH go as follows:

  • Currently the debt-to-equity ratio of 1.62 is quite high overall and when compared to the industry average, suggesting that the current management of debt levels should be re-evaluated. Along with this, the company manages to maintain a quick ratio of 0.09, which clearly demonstrates the inability to cover short-term cash needs.
  • 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 Specialty Retail industry and the overall market, CACHE INC's return on equity significantly trails that of both the industry average and the S&P 500.
  • The gross profit margin for CACHE INC is currently lower than what is desirable, coming in at 27.28%. It has decreased from the same quarter the previous year. Along with this, the net profit margin of -22.79% is significantly below that of the industry average.
  • CACH'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 56.90%, 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.
  • CACH, with its decline in revenue, slightly underperformed the industry average of 3.6%. Since the same quarter one year prior, revenues fell by 11.4%. 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: Cache 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 Nepstar Chain Drugstore ( NPD) was another company that pushed the Retail industry higher today. China Nepstar Chain Drugstore was up $0.05 (2.1%) to $2.41 on light volume. Throughout the day, 42,923 shares of China Nepstar Chain Drugstore exchanged hands as compared to its average daily volume of 124,300 shares. The stock ranged in a price between $2.35-$2.43 after having opened the day at $2.40 as compared to the previous trading day's close of $2.36.

China Nepstar Chain Drugstore Ltd., through its subsidiaries, owns and operates a retail drugstore chain in China. China Nepstar Chain Drugstore has a market cap of $234.9 million and is part of the services sector. Shares are up 28.3% year-to-date as of the close of trading on Thursday. Currently there are no analysts who rate China Nepstar Chain Drugstore a buy, 1 analyst rates it a sell, and none rate it a hold.

TheStreet Ratings rates China Nepstar Chain Drugstore as a hold. The company's strengths can be seen in multiple areas, such as its revenue growth, solid stock price performance and largely solid financial position with reasonable debt levels by most measures. 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 NPD go as follows:

  • The revenue growth came in higher than the industry average of 6.5%. Since the same quarter one year prior, revenues slightly increased by 8.0%. 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.
  • Compared to its closing price of one year ago, NPD's share price has jumped by 42.10%, exceeding the performance of the broader market during that same time frame. Regarding the stock's future course, our hold rating indicates that we do not recommend additional investment in this stock despite its gains in the past year.
  • NPD 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. Although the company had a strong debt-to-equity ratio, its quick ratio of 0.79 is somewhat weak and could be cause for future problems.
  • CHINA NEPSTAR CHAIN DRUG-ADS 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. Earnings per share have declined over the last two years. We anticipate that this should continue in the coming year. During the past fiscal year, CHINA NEPSTAR CHAIN DRUG-ADS reported lower earnings of $0.02 versus $0.14 in the prior year. For the next year, the market is expecting a contraction of 50.0% in earnings ($0.01 versus $0.02).
  • 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 Food & Staples Retailing industry. The net income has significantly decreased by 355.5% when compared to the same quarter one year ago, falling from $1.15 million to -$2.93 million.

You can view the full analysis from the report here: China Nepstar Chain Drugstore 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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