3 Stocks Pushing The Diversified Services Industry Lower

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The Diversified Services industry as a whole closed the day up 0.4% versus the S&P 500, which was unchanged. Laggards within the Diversified Services industry included Bioanalytical Systems ( BASI), down 3.2%, PDI ( PDII), down 1.6%, Magal Security Systems ( MAGS), down 4.7%, China HGS Real Estate ( HGSH), down 10.5% and Hudson Global ( HSON), down 1.9%.

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

Magal Security Systems ( MAGS) is one of the companies that pushed the Diversified Services industry lower today. Magal Security Systems was down $0.18 (4.7%) to $3.67 on light volume. Throughout the day, 1,800 shares of Magal Security Systems exchanged hands as compared to its average daily volume of 11,200 shares. The stock ranged in price between $3.62-$3.80 after having opened the day at $3.80 as compared to the previous trading day's close of $3.85.

Magal Security Systems Ltd. develops, manufactures, and sells safety, security, site management, and intelligence gathering and compilation solutions and products worldwide. It operates through: Perimeter Products, Turnkey Projects, and Cyber segments. Magal Security Systems has a market cap of $58.6 million and is part of the services sector. Shares are up 8.1% year-to-date as of the close of trading on Friday.

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TheStreet Ratings rates Magal Security Systems as a hold. Among the primary strengths of the company is its solid financial position based on a variety of debt and liquidity measures that we have evaluated. At the same time, however, 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 MAGS go as follows:

  • MAGS's debt-to-equity ratio is very low at 0.15 and is currently below that of the industry average, implying that there has been very successful management of debt levels. To add to this, MAGS has a quick ratio of 2.35, which demonstrates the ability of the company to cover short-term liquidity needs.
  • MAGS, with its decline in revenue, underperformed when compared the industry average of 9.2%. Since the same quarter one year prior, revenues slightly dropped by 7.0%. The declining revenue appears to have seeped down to the company's bottom line, decreasing earnings per share.
  • In its most recent trading session, MAGS 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 toward the future, the fact that the stock has come down in price over the past year should not necessarily be interpreted as a negative; it could be one of the factors that may help make the stock attractive down the road. Right now, however, we believe that it is too soon to buy.
  • 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 Electronic Equipment, Instruments & Components industry and the overall market, MAGAL SECURITY SYSTEMS's return on equity significantly trails that of both the industry average and the S&P 500.
  • The gross profit margin for MAGAL SECURITY SYSTEMS is currently lower than what is desirable, coming in at 32.68%. It has decreased from the same quarter the previous year. Along with this, the net profit margin of -15.78% is significantly below that of the industry average.

You can view the full analysis from the report here: Magal Security Systems Ratings Report

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At the close, PDI ( PDII) was down $0.07 (1.6%) to $4.22 on light volume. Throughout the day, 2,474 shares of PDI exchanged hands as compared to its average daily volume of 9,400 shares. The stock ranged in price between $4.10-$4.27 after having opened the day at $4.27 as compared to the previous trading day's close of $4.29.

PDI, Inc. provides outsourced commercial services to pharmaceutical, biotechnology, and healthcare companies in the United States. PDI has a market cap of $68.6 million and is part of the services sector. Shares are down 10.8% year-to-date as of the close of trading on Friday. Currently there is 1 analyst who rates PDI a buy, no analysts rate it a sell, and 1 rates it a hold.

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TheStreet Ratings rates PDI as a sell. The company's weaknesses can be seen in multiple areas, such as its unimpressive growth in net income, poor profit margins, weak operating cash flow and feeble growth in its earnings per share.

Highlights from TheStreet Ratings analysis on PDII 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 Health Care Providers & Services industry. The net income has significantly decreased by 175.8% when compared to the same quarter one year ago, falling from $2.13 million to -$1.61 million.
  • The gross profit margin for PDI INC is rather low; currently it is at 16.98%. It has decreased from the same quarter the previous year. Along with this, the net profit margin of -4.91% trails that of the industry average.
  • Net operating cash flow has significantly decreased to -$6.46 million or 628.88% when compared to the same quarter last year. In addition, when comparing to the industry average, the firm's growth rate is much lower.
  • PDI 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. This company has reported somewhat volatile earnings recently. We feel it is likely to report a decline in earnings in the coming year. During the past fiscal year, PDI INC continued to lose money by earning -$0.31 versus -$1.75 in the prior year. For the next year, the market is expecting a contraction of 35.5% in earnings (-$0.42 versus -$0.31).
  • In its most recent trading session, PDII 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.

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

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Bioanalytical Systems ( BASI) was another company that pushed the Diversified Services industry lower today. Bioanalytical Systems was down $0.09 (3.2%) to $2.68 on light volume. Throughout the day, 580 shares of Bioanalytical Systems exchanged hands as compared to its average daily volume of 12,900 shares. The stock ranged in price between $2.68-$2.82 after having opened the day at $2.82 as compared to the previous trading day's close of $2.77.

Bioanalytical Systems, Inc. provides drug discovery and development services, and analytical instruments for pharmaceutical, biotechnology, academic, and government organizations in North America, the Pacific Rim, Europe, and internationally. Bioanalytical Systems has a market cap of $21.1 million and is part of the services sector. Shares are up 2.2% year-to-date as of the close of trading on Friday.

TheStreet Ratings rates Bioanalytical Systems as a sell. The area that we feel has been the company's primary weakness has been its unimpressive growth in net income.

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Highlights from TheStreet Ratings analysis on BASI go as follows:

  • The company, on the basis of net income growth from the same quarter one year ago, has underperformed when compared to that of the S&P 500 and greatly underperformed compared to the Life Sciences Tools & Services industry average. The net income increased by 29.6% when compared to the same quarter one year prior, rising from -$0.31 million to -$0.22 million.
  • The company's current return on equity greatly increased when compared to its ROE from the same quarter one year prior. This is a signal of significant strength within the corporation. Compared to other companies in the Life Sciences Tools & Services industry and the overall market on the basis of return on equity, BIOANALYTICAL SYSTEMS INC underperformed against that of the industry average and is significantly less than that of the S&P 500.
  • The current debt-to-equity ratio, 0.58, is low and is below the industry average, implying that there has been successful management of debt levels. Even though the company has a strong debt-to-equity ratio, the quick ratio of 0.30 is very weak and demonstrates a lack of ability to pay short-term obligations.
  • 40.75% is the gross profit margin for BIOANALYTICAL SYSTEMS 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 -3.70% is in-line with the industry average.
  • Net operating cash flow has significantly increased by 85.51% to -$0.03 million when compared to the same quarter last year. In addition, BIOANALYTICAL SYSTEMS INC has also vastly surpassed the industry average cash flow growth rate of -48.30%.

You can view the full analysis from the report here: Bioanalytical Systems Ratings Report

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