3 Stocks Pushing The Diversified Services Industry Lower

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The Diversified Services industry as a whole closed the day down 0.6% versus the S&P 500, which was down 0.9%. Laggards within the Diversified Services industry included RLJ Entertainment ( RLJE), down 3.3%, UniTek Global Services ( UNTK), down 7.4%, MGT Capital Investments ( MGT), down 3.3%, AeroCentury ( ACY), down 2.7% and Hudson Global ( HSON), down 3.9%.

TheStreet Ratings Group would like to highlight 3 stocks that pushed the industry lower today:

AeroCentury ( ACY) is one of the companies that pushed the Diversified Services industry lower today. AeroCentury was down $0.45 (2.7%) to $16.05 on heavy volume. Throughout the day, 6,525 shares of AeroCentury exchanged hands as compared to its average daily volume of 3,800 shares. The stock ranged in price between $16.05-$17.05 after having opened the day at $16.87 as compared to the previous trading day's close of $16.50.

AeroCentury Corp. acquires and invests in used regional aircraft and aircraft engines for lease to regional carriers worldwide. As of February 28, 2014, the company owned 9 Bombardier Dash-8-300, 3 Bombardier CRJ-700, 7 Fokker 100, 3 Bombardier Dash-8-Q400, and 1 Bombardier CRJ-705 aircraft. AeroCentury has a market cap of $25.6 million and is part of the services sector. Shares are down 4.0% year-to-date as of the close of trading on Wednesday. Currently there is 1 analyst who rates AeroCentury a buy, no analysts rate it a sell, and none rate it a hold.

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TheStreet Ratings rates AeroCentury 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, generally high debt management risk, disappointing return on equity and generally disappointing historical performance in the stock itself.

Highlights from TheStreet Ratings analysis on ACY go as follows:

  • The debt-to-equity ratio is very high at 2.26 and currently higher than the industry average, implying increased risk associated with the management of debt levels within the company.
  • 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 Trading Companies & Distributors industry and the overall market, AEROCENTURY CORP's return on equity significantly trails that of both the industry average and the S&P 500.
  • AEROCENTURY CORP 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 year. We anticipate that this should continue in the coming year. During the past fiscal year, AEROCENTURY CORP reported lower earnings of $1.86 versus $3.31 in the prior year. For the next year, the market is expecting a contraction of 114.0% in earnings (-$0.26 versus $1.86).
  • 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 Trading Companies & Distributors industry. The net income has significantly decreased by 90.3% when compared to the same quarter one year ago, falling from $3.82 million to $0.37 million.
  • The share price of AEROCENTURY CORP has not done very well: it is down 12.04% 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: AeroCentury Ratings Report

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At the close, UniTek Global Services ( UNTK) was down $0.04 (7.4%) to $0.50 on light volume. Throughout the day, 21,439 shares of UniTek Global Services exchanged hands as compared to its average daily volume of 59,300 shares. The stock ranged in price between $0.45-$0.55 after having opened the day at $0.51 as compared to the previous trading day's close of $0.54.

UniTek Global Services, Inc. provides technical services to the wireless telecommunications, public safety, satellite television, and broadband cable industries in the United States and Canada. The company operates in two segments, Fulfillment, and Engineering and Construction. UniTek Global Services has a market cap of $10.8 million and is part of the services sector. Shares are down 67.7% year-to-date as of the close of trading on Wednesday. Currently there are no analysts who rate UniTek Global Services a buy, no analysts rate it a sell, and 1 rates it a hold.

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TheStreet Ratings rates UniTek Global Services as a sell. The company's weaknesses can be seen in multiple areas, such as its deteriorating net income, poor profit margins, weak operating cash flow, generally disappointing historical performance in the stock itself and feeble growth in its earnings per share.

Highlights from TheStreet Ratings analysis on UNTK 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 Construction & Engineering industry. The net income has significantly decreased by 156.1% when compared to the same quarter one year ago, falling from -$7.66 million to -$19.63 million.
  • The gross profit margin for UNITEK GLOBAL SERVICES INC is currently extremely low, coming in at 14.98%. It has decreased from the same quarter the previous year. Along with this, the net profit margin of -22.15% is significantly below that of the industry average.
  • Net operating cash flow has significantly decreased to -$2.32 million or 135.15% 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 70.75%, worse than the S&P 500's performance. Consistent with the plunge in the stock price, the company's earnings per share are down 175.67% compared to the year-earlier 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.
  • UNITEK GLOBAL SERVICES INC 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 year. However, the consensus estimate suggests that this trend should reverse in the coming year. During the past fiscal year, UNITEK GLOBAL SERVICES INC reported poor results of -$2.65 versus -$2.28 in the prior year. This year, the market expects an improvement in earnings (-$0.99 versus -$2.65).

You can view the full analysis from the report here: UniTek Global Services 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.

RLJ Entertainment ( RLJE) was another company that pushed the Diversified Services industry lower today. RLJ Entertainment was down $0.12 (3.3%) to $3.50 on light volume. Throughout the day, 3,861 shares of RLJ Entertainment exchanged hands as compared to its average daily volume of 5,800 shares. The stock ranged in price between $3.50-$3.58 after having opened the day at $3.58 as compared to the previous trading day's close of $3.62.

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 $50.4 million and is part of the services sector. Shares are down 24.4% year-to-date as of the close of trading on Wednesday.

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 and poor profit margins.

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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.
  • In its most recent trading session, RLJE has closed at a price level that was not very different from its closing price of one year earlier. This is probably due to its weak earnings growth as well as other mixed factors. Turning our attention to the future direction of the stock, we do not believe this stock offers ample reward opportunity to compensate for the risks, despite the fact that it rose over the past year.
  • 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.

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