3 Stocks Improving Performance Of The Diversified Services Industry

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 104.52 points (-0.6%) at 16,739 as of Thursday, June 12, 2014, 3:55 PM ET. The NYSE advances/declines ratio sits at 1,187 issues advancing vs. 1,811 declining with 135 unchanged.

The Diversified Services industry as a whole closed the day down 0.6% versus the S&P 500, which was down 0.9%. Top gainers within the Diversified Services industry included Spar Group ( SGRP), up 13.3%, General Employment ( JOB), up 11.1%, VirtualScopics ( VSCP), up 2.9%, China Yida ( CNYD), up 2.9% and Bioanalytical Systems ( BASI), up 5.3%.

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

China Yida ( CNYD) is one of the companies that pushed the Diversified Services industry higher today. China Yida was up $0.10 (2.9%) to $3.50 on light volume. Throughout the day, 3,120 shares of China Yida exchanged hands as compared to its average daily volume of 10,000 shares. The stock ranged in a price between $3.24-$3.50 after having opened the day at $3.42 as compared to the previous trading day's close of $3.40.

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 $13.1 million and is part of the services sector. Shares are up 18.1% year-to-date as of the close of trading on Wednesday. Currently there are no analysts who rate China Yida a buy, no analysts rate it a sell, and none rate it a hold.

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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 -$4.37 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 150.2% when compared to the same quarter one year ago, falling from -$2.91 million to -$7.29 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 -$4.16 million or 73.61% when compared to the same quarter last year. In addition, when comparing to the industry average, the firm's growth rate is much lower.
  • The share price of CHINA YIDA HOLDING CO has not done very well: it is down 17.25% and has underperformed the S&P 500, in part reflecting the company's sharply declining earnings per share when compared to the year-earlier quarter. 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.

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.

At the close, VirtualScopics ( VSCP) was up $0.12 (2.9%) to $4.30 on average volume. Throughout the day, 3,956 shares of VirtualScopics exchanged hands as compared to its average daily volume of 4,400 shares. The stock ranged in a price between $4.16-$4.30 after having opened the day at $4.21 as compared to the previous trading day's close of $4.18.

VirtualScopics, Inc. provides imaging solutions for the pharmaceutical, biotechnology, and medical device industries. VirtualScopics has a market cap of $12.7 million and is part of the services sector. Shares are up 22.8% year-to-date as of the close of trading on Wednesday. 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 25.91%, 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 19.1%. 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.

Spar Group ( SGRP) was another company that pushed the Diversified Services industry higher today. Spar Group was up $0.20 (13.3%) to $1.70 on light volume. Throughout the day, 990 shares of Spar Group exchanged hands as compared to its average daily volume of 9,100 shares. The stock ranged in a price between $1.70-$1.70 after having opened the day at $1.70 as compared to the previous trading day's close of $1.50.

SPAR Group Inc., together with its subsidiaries, provides merchandising and other marketing services worldwide. Spar Group has a market cap of $31.4 million and is part of the services sector. Shares are down 24.2% year-to-date as of the close of trading on Wednesday. Currently there are no analysts who rate Spar Group a buy, no analysts rate it a sell, and none rate it a hold.

TheStreet Ratings rates Spar Group 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 unimpressive growth in net income, poor profit margins and weak operating cash flow.

Highlights from TheStreet Ratings analysis on SGRP go as follows:

  • Despite its growing revenue, the company underperformed as compared with the industry average of 14.9%. Since the same quarter one year prior, revenues rose by 12.2%. 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.
  • SGRP's debt-to-equity ratio is very low at 0.24 and is currently below that of the industry average, implying that there has been very successful management of debt levels. To add to this, SGRP has a quick ratio of 2.08, which demonstrates the ability of the company to cover short-term liquidity needs.
  • SPAR GROUP INC's earnings have gone downhill when comparing its most recently reported quarter with the same quarter a year earlier. 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, SPAR GROUP INC increased its bottom line by earning $0.15 versus $0.13 in the prior year.
  • Net operating cash flow has significantly decreased to $2.47 million or 50.56% when compared to the same quarter last year. In addition, when comparing to the industry average, the firm's growth rate is much lower.
  • 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 938.6% when compared to the same quarter one year ago, falling from $0.04 million to -$0.37 million.

You can view the full analysis from the report here: Spar Group 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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