3 Stocks Driving The Diversified Services Industry Higher

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.

Two out of the three major indices traded up today The three major indices are trading lower today with the Dow Jones Industrial Average ( ^DJI) trading up 5 points (0.0%) at 16,911 as of Thursday, June 19, 2014, 3:55 PM ET. The NYSE advances/declines ratio sits at 1,514 issues advancing vs. 1,469 declining with 176 unchanged.

The Diversified Services industry as a whole closed the day down 0.4% versus the S&P 500, which was up 0.1%. Top gainers within the Diversified Services industry included Spar Group ( SGRP), up 2.0%, General Employment ( JOB), up 2.2%, Command Security ( MOC), up 2.9%, Lime Energy ( LIME), up 1.6% and NV5 Holdings ( NVEE), up 2.5%.

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

Lime Energy ( LIME) is one of the companies that pushed the Diversified Services industry higher today. Lime Energy was up $0.04 (1.6%) to $2.55 on average volume. Throughout the day, 9,381 shares of Lime Energy exchanged hands as compared to its average daily volume of 7,700 shares. The stock ranged in a price between $2.51-$2.60 after having opened the day at $2.53 as compared to the previous trading day's close of $2.51.

Lime Energy Co. is engaged in designing and implementing energy efficiency programs for utilities in the United States. Lime Energy has a market cap of $9.4 million and is part of the services sector. Shares are down 12.5% year-to-date as of the close of trading on Wednesday. Currently there are no analysts who rate Lime Energy 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 Lime Energy as a sell. The company's weaknesses can be seen in multiple areas, such as its weak operating cash flow, poor profit margins and generally disappointing historical performance in the stock itself.

Highlights from TheStreet Ratings analysis on LIME go as follows:

  • Net operating cash flow has significantly decreased to -$6.94 million or 339.08% 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 gross profit margin for LIME ENERGY CO is currently lower than what is desirable, coming in at 31.90%. Regardless of LIME's low profit margin, it has managed to increase from the same period last year. Despite the mixed results of the gross profit margin, LIME's net profit margin of -9.51% significantly underperformed when compared to the industry average.
  • LIME'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 49.71%, 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.
  • 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 Electrical Equipment industry and the overall market, LIME ENERGY CO's return on equity significantly trails that of both the industry average and the S&P 500.
  • LIME 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. Despite the fact that LIME'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: Lime Energy 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, Command Security ( MOC) was up $0.05 (2.9%) to $1.85 on light volume. Throughout the day, 413 shares of Command Security exchanged hands as compared to its average daily volume of 10,300 shares. The stock ranged in a price between $1.80-$1.85 after having opened the day at $1.80 as compared to the previous trading day's close of $1.80.

Command Security Corporation provides uniformed security officers and aviation security services to commercial, financial, industrial, aviation, and governmental customers in the United States. Command Security has a market cap of $17.2 million and is part of the services sector. Shares are down 12.6% year-to-date as of the close of trading on Wednesday. Currently there are no analysts who rate Command Security 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 Command Security 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 increase in stock price during the past year. However, as a counter to these strengths, we also find weaknesses including weak operating cash flow and poor profit margins.

Highlights from TheStreet Ratings analysis on MOC go as follows:

  • MOC's revenue growth has slightly outpaced the industry average of 3.8%. Since the same quarter one year prior, revenues slightly increased by 3.9%. This growth in revenue appears to have trickled down to the company's bottom line, improving the earnings per share.
  • The current debt-to-equity ratio, 0.50, is low and is below the industry average, implying that there has been successful management of debt levels. Along with the favorable debt-to-equity ratio, the company maintains an adequate quick ratio of 1.46, which illustrates the ability to avoid short-term cash problems.
  • COMMAND SECURITY CORP reported significant earnings per share improvement in the most recent quarter compared to the same quarter a year ago. The company has demonstrated a pattern of positive earnings per share growth over the past year. During the past fiscal year, COMMAND SECURITY CORP increased its bottom line by earning $0.04 versus $0.01 in the prior year.
  • The gross profit margin for COMMAND SECURITY CORP is currently extremely low, coming in at 14.22%. Regardless of MOC's low profit margin, it has managed to increase from the same period last year. Despite the mixed results of the gross profit margin, the net profit margin of 1.43% trails the industry average.
  • Net operating cash flow has significantly decreased to $0.34 million or 78.45% 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: Command Security 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 $0.03 (2.0%) to $1.50 on light volume. Throughout the day, 4,195 shares of Spar Group exchanged hands as compared to its average daily volume of 7,800 shares. The stock ranged in a price between $1.50-$1.54 after having opened the day at $1.50 as compared to the previous trading day's close of $1.47.

SPAR Group Inc., together with its subsidiaries, provides merchandising and other marketing services worldwide. Spar Group has a market cap of $32.0 million and is part of the services sector. Shares are down 25.8% 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 14.8%. 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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