3 Stocks Pushing The Specialty Retail Industry Lower

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The Specialty Retail industry as a whole closed the day down 1.4% versus the S&P 500, which was down 0.9%. Laggards within the Specialty Retail industry included DGSE Companies ( DGSE), down 4.8%, Dover Saddlery ( DOVR), down 2.1%, Mecox Lane ( MCOX), down 2.8%, Trans World Entertainment ( TWMC), down 1.8% and Lentuo International ( LAS), down 1.7%.

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

Trans World Entertainment ( TWMC) is one of the companies that pushed the Specialty Retail industry lower today. Trans World Entertainment was down $0.06 (1.8%) to $3.34 on average volume. Throughout the day, 44,657 shares of Trans World Entertainment exchanged hands as compared to its average daily volume of 41,200 shares. The stock ranged in price between $3.32-$3.44 after having opened the day at $3.38 as compared to the previous trading day's close of $3.40.

Trans World Entertainment Corporation, together with its subsidiaries, operates as a specialty retailer of entertainment products, including video, music, electronics, trend items, video games, accessories, and related products through its retail stores and e-commerce sites. Trans World Entertainment has a market cap of $108.5 million and is part of the services sector. Shares are down 23.1% year-to-date as of the close of trading on Wednesday.

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TheStreet Ratings rates Trans World Entertainment as a buy. Among the primary strengths of the company is its expanding profit margins over time. We feel these strengths outweigh the fact that the company has had somewhat weak growth in earnings per share.

Highlights from TheStreet Ratings analysis on TWMC go as follows:

  • 37.58% is the gross profit margin for TRANS WORLD ENTMT CORP which we consider to be strong. Regardless of TWMC's high profit margin, it has managed to decrease from the same period last year. Despite the mixed results of the gross profit margin, the net profit margin of -0.44% trails the industry average.
  • TWMC, with its decline in revenue, slightly underperformed the industry average of 2.0%. Since the same quarter one year prior, revenues slightly dropped by 7.2%. The declining revenue appears to have seeped down to the company's bottom line, decreasing earnings per share.
  • Despite any intermediate fluctuations, we have only bad news to report on this stock's performance over the last year: it has tumbled by 25.17%, worse than the S&P 500's performance. Consistent with the plunge in the stock price, the company's earnings per share are down 120.00% compared to the year-earlier quarter. Looking ahead, the stock's sharp decline over the past year may have been what was needed in order to bring its value into alignment with its fundamentals and others in its industry.
  • TRANS WORLD ENTMT 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. The company has suffered a declining pattern earnings per share over the past two years. During the past fiscal year, TRANS WORLD ENTMT CORP reported lower earnings of $0.26 versus $1.05 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 Specialty Retail industry. The net income has significantly decreased by 124.2% when compared to the same quarter one year ago, falling from $1.60 million to -$0.39 million.

You can view the full analysis from the report here: Trans World Entertainment Ratings Report

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At the close, Mecox Lane ( MCOX) was down $0.13 (2.8%) to $4.58 on light volume. Throughout the day, 5,114 shares of Mecox Lane exchanged hands as compared to its average daily volume of 17,400 shares. The stock ranged in price between $4.57-$4.68 after having opened the day at $4.66 as compared to the previous trading day's close of $4.71.

Mecox Lane Limited designs and sells apparel, accessories, and home and healthcare products through its online platform and stores in the People's Republic of China. Mecox Lane has a market cap of $58.7 million and is part of the services sector. Shares are up 29.0% year-to-date as of the close of trading on Wednesday.

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TheStreet Ratings rates Mecox Lane 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 and disappointing return on equity.

Highlights from TheStreet Ratings analysis on MCOX go as follows:

  • MECOX LANE LTD's earnings per share declined by 50.0% in the most recent quarter compared to the same quarter a year ago. The company has suffered a declining pattern earnings per share over the past two years. During the past fiscal year, MECOX LANE LTD reported poor results of -$2.20 versus -$1.95 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 Internet & Catalog Retail industry. The net income has significantly decreased by 55.5% when compared to the same quarter one year ago, falling from -$7.22 million to -$11.22 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 Internet & Catalog Retail industry and the overall market, MECOX LANE LTD's return on equity significantly trails that of both the industry average and the S&P 500.
  • The revenue fell significantly faster than the industry average of 4.3%. Since the same quarter one year prior, revenues fell by 41.4%. Weakness in the company's revenue seems to have hurt the bottom line, decreasing earnings per share.
  • MCOX's debt-to-equity ratio is very low at 0.02 and is currently below that of the industry average, implying that there has been very successful management of debt levels. Despite the fact that MCOX's debt-to-equity ratio is low, the quick ratio, which is currently 0.63, displays a potential problem in covering short-term cash needs.

You can view the full analysis from the report here: Mecox Lane Ratings Report

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Dover Saddlery ( DOVR) was another company that pushed the Specialty Retail industry lower today. Dover Saddlery was down $0.11 (2.1%) to $5.21 on light volume. Throughout the day, 491 shares of Dover Saddlery exchanged hands as compared to its average daily volume of 6,500 shares. The stock ranged in price between $5.05-$5.32 after having opened the day at $5.32 as compared to the previous trading day's close of $5.32.

Dover Saddlery, Inc. operates as a specialty retailer and omni-channel marketer of equestrian products in the United States. The company offers a selection of products required to own, ride, train, and compete with a horse. Dover Saddlery has a market cap of $27.9 million and is part of the services sector. Shares are down 0.6% year-to-date as of the close of trading on Wednesday.

TheStreet Ratings rates Dover Saddlery as a hold. The company's strengths can be seen in multiple areas, such as its revenue growth, reasonable valuation levels and solid stock price performance. However, as a counter to these strengths, we also find weaknesses including unimpressive growth in net income, weak operating cash flow and feeble growth in the company's earnings per share.

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Highlights from TheStreet Ratings analysis on DOVR go as follows:

  • The revenue growth came in higher than the industry average of 2.0%. Since the same quarter one year prior, revenues slightly increased by 9.3%. This growth in revenue does not appear to have trickled down to the company's bottom line, displaying stagnant earnings per share.
  • Compared to its closing price of one year ago, DOVR's share price has jumped by 31.32%, exceeding the performance of the broader market during that same time frame. Although DOVR had significant growth over the past year, our hold rating indicates that we do not recommend additional investment in this stock at the current time.
  • 37.72% is the gross profit margin for DOVER SADDLERY INC which we consider to be strong. It has increased from the same quarter the previous year. Regardless of the strong results of the gross profit margin, the net profit margin of -2.75% trails the industry average.
  • 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 Specialty Retail industry. The net income has decreased by 0.9% when compared to the same quarter one year ago, dropping from -$0.54 million to -$0.54 million.
  • Net operating cash flow has significantly decreased to -$7.09 million or 81.24% when compared to the same quarter last year. In addition, when comparing to the industry average, the firm's growth rate is much lower.

You can view the full analysis from the report here: Dover Saddlery 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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