3 Stocks Pushing The Retail Industry Lower

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.

The Retail industry as a whole closed the day down 0.6% versus the S&P 500, which was up 0.2%. Laggards within the Retail industry included Acorn International ( ATV), down 2.2%, China Jo-Jo Drugstores ( CJJD), down 4.9%, Cencosud ( CNCO), down 2.1%, Gaiam ( GAIA), down 5.0% and Gordman's Stores ( GMAN), down 2.8%.

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

Cencosud ( CNCO) is one of the companies that pushed the Retail industry lower today. Cencosud was down $0.20 (2.1%) to $9.28 on light volume. Throughout the day, 22,668 shares of Cencosud exchanged hands as compared to its average daily volume of 57,000 shares. The stock ranged in price between $9.18-$9.44 after having opened the day at $9.42 as compared to the previous trading day's close of $9.48.

Cencosud S.A., together with its subsidiaries, operates as a multi-brand retailer in Argentina, Brazil, Chile, Peru, and Colombia. Cencosud has a market cap of $8.9 billion and is part of the technology sector. Shares are down 12.9% year-to-date as of the close of trading on Thursday. Currently there are no analysts who rate Cencosud a buy, no analysts rate it a sell, and 4 rate it a hold.

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TheStreet Ratings rates Cencosud as a hold. The company's strengths can be seen in multiple areas, such as its increase in net income and reasonable valuation levels. However, as a counter to these strengths, we also find weaknesses including a generally disappointing performance in the stock itself, disappointing return on equity and weak operating cash flow.

Highlights from TheStreet Ratings analysis on CNCO go as follows:

  • The net income growth from the same quarter one year ago has significantly exceeded that of the S&P 500 and the Food & Staples Retailing industry. The net income increased by 77.3% when compared to the same quarter one year prior, rising from $187.83 million to $333.11 million.
  • CNCO, with its decline in revenue, slightly underperformed the industry average of 5.5%. Since the same quarter one year prior, revenues slightly dropped by 5.5%. The declining revenue has not hurt the company's bottom line, with increasing earnings per share.
  • Net operating cash flow has decreased to $530.12 million or 36.78% when compared to the same quarter last year. In addition, when comparing the cash generation rate to the industry average, the firm's growth is significantly lower.
  • CNCO'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 28.98%, 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. Although its share price is down sharply from a year ago, do not assume that it can now be tagged as cheap and attractive. The reality is that, based on its current price in relation to its earnings, CNCO is still more expensive than most of the other companies in its industry.

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

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At the close, China Jo-Jo Drugstores ( CJJD) was down $0.08 (4.9%) to $1.55 on average volume. Throughout the day, 48,212 shares of China Jo-Jo Drugstores exchanged hands as compared to its average daily volume of 52,100 shares. The stock ranged in price between $1.50-$1.67 after having opened the day at $1.63 as compared to the previous trading day's close of $1.63.

China Jo-Jo Drugstores, Inc. operates as a retailer and distributor of pharmaceutical and other healthcare products in the People's Republic of China. China Jo-Jo Drugstores has a market cap of $23.0 million and is part of the technology sector. Shares are up 67.7% year-to-date as of the close of trading on Thursday.

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TheStreet Ratings rates China Jo-Jo Drugstores 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, poor profit margins and weak operating cash flow.

Highlights from TheStreet Ratings analysis on CJJD go as follows:

  • CHINA JO-JO DRUGSTORES 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 two years. During the past fiscal year, CHINA JO-JO DRUGSTORES INC swung to a loss, reporting -$1.05 versus $0.60 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 Food & Staples Retailing industry. The net income has significantly decreased by 150.5% when compared to the same quarter one year ago, falling from -$3.49 million to -$8.74 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 Food & Staples Retailing industry and the overall market, CHINA JO-JO DRUGSTORES INC's return on equity significantly trails that of both the industry average and the S&P 500.
  • The gross profit margin for CHINA JO-JO DRUGSTORES INC is currently extremely low, coming in at 3.84%. It has decreased significantly from the same period last year. Along with this, the net profit margin of -48.98% is significantly below that of the industry average.
  • Net operating cash flow has significantly decreased to -$3.27 million or 1513.85% 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: China Jo-Jo Drugstores 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.

Acorn International ( ATV) was another company that pushed the Retail industry lower today. Acorn International was down $0.04 (2.2%) to $1.81 on heavy volume. Throughout the day, 134,435 shares of Acorn International exchanged hands as compared to its average daily volume of 12,000 shares. The stock ranged in price between $1.73-$2.20 after having opened the day at $1.90 as compared to the previous trading day's close of $1.85.

Acorn International, Inc., an integrated multi-platform marketing company, develops, promotes, and sells a portfolio of proprietary-branded products; and third parties products. The company operates two sales platforms, including integrated direct sales and a nationwide distribution network. Acorn International has a market cap of $49.4 million and is part of the technology sector. Shares are up 19.2% year-to-date as of the close of trading on Thursday.

TheStreet Ratings rates Acorn International 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 and generally disappointing historical performance in the stock itself.

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Highlights from TheStreet Ratings analysis on ATV go as follows:

  • ACORN INTERNATIONAL INC -ADR's earnings per share declined by 30.4% in the most recent quarter compared to 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, ACORN INTERNATIONAL INC -ADR reported poor results of -$1.45 versus -$0.59 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 decreased by 21.5% when compared to the same quarter one year ago, dropping from -$6.87 million to -$8.34 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, ACORN INTERNATIONAL INC -ADR's return on equity significantly trails that of both the industry average and the S&P 500.
  • The share price of ACORN INTERNATIONAL INC -ADR has not done very well: it is down 17.57% 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.
  • 43.21% is the gross profit margin for ACORN INTERNATIONAL INC -ADR which we consider to be strong. Regardless of ATV's high profit margin, it has managed to decrease from the same period last year. Despite the mixed results of the gross profit margin, ATV's net profit margin of -29.44% significantly underperformed when compared to the industry average.

You can view the full analysis from the report here: Acorn International 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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