3 Stocks Pushing The Services Sector 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 Services sector as a whole closed the day down 0.6% versus the S&P 500, which was down 0.7%. Laggards within the Services sector included Starz ( STRZB), down 2.6%, Learning Tree International ( LTRE), down 1.8%, Liberty Interactive ( LINTB), down 7.0%, Haverty Furniture Companies ( HVT.A), down 3.4% and QKL Stores ( QKLS), down 6.4%.

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

QKL Stores ( QKLS) is one of the companies that pushed the Services sector lower today. QKL Stores was down $0.22 (6.4%) to $3.15 on light volume. Throughout the day, 1,184 shares of QKL Stores exchanged hands as compared to its average daily volume of 3,000 shares. The stock ranged in price between $3.15-$3.15 after having opened the day at $3.15 as compared to the previous trading day's close of $3.37.

QKL Stores Inc., through its subsidiaries, engages in the operation of retail chain stores in the People's Republic of China. The company's supermarkets and hypermarkets sell a selection of merchandise, including groceries, fresh food, and non-food items. QKL Stores has a market cap of $5.1 million and is part of the retail industry. Shares are down 19.8% year-to-date as of the close of trading on Monday.

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TheStreet Ratings rates QKL Stores 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, generally high debt management risk and generally disappointing historical performance in the stock itself.

Highlights from TheStreet Ratings analysis on QKLS 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 Food & Staples Retailing industry. The net income has significantly decreased by 858.3% when compared to the same quarter one year ago, falling from $0.40 million to -$3.06 million.
  • The gross profit margin for QKL STORES INC is rather low; currently it is at 17.12%. It has decreased from the same quarter the previous year. Along with this, the net profit margin of -3.55% trails that of the industry average.
  • Net operating cash flow has decreased to $18.00 million or 25.83% 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.
  • QKLS's debt-to-equity ratio of 0.88 is somewhat low overall, but it is high when compared to the industry average, implying that the management of the debt levels should be evaluated further. Even though the debt-to-equity ratio shows mixed results, the company's quick ratio of 0.47 is very low and demonstrates very weak liquidity.
  • The share price of QKL STORES INC has not done very well: it is down 14.94% 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: QKL Stores Ratings Report

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At the close, Liberty Interactive ( LINTB) was down $2.17 (7.0%) to $28.93 on average volume. Throughout the day, 159 shares of Liberty Interactive exchanged hands as compared to its average daily volume of 200 shares. The stock ranged in price between $28.93-$28.93 after having opened the day at $28.93 as compared to the previous trading day's close of $31.10.

Liberty Interactive has a market cap of $898.3 million and is part of the retail industry. Shares are up 5.8% year-to-date as of the close of trading on Monday.

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Highlights from TheStreet Ratings analysis on LINTB go as follows:

You can view the full analysis from the report here: Liberty Interactive 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.

Learning Tree International ( LTRE) was another company that pushed the Services sector lower today. Learning Tree International was down $0.05 (1.8%) to $2.53 on average volume. Throughout the day, 1,300 shares of Learning Tree International exchanged hands as compared to its average daily volume of 1,500 shares. The stock ranged in price between $2.51-$2.53 after having opened the day at $2.51 as compared to the previous trading day's close of $2.57.

Learning Tree International, Inc., together with its subsidiaries, develops, markets, and delivers a library of instructor-led classroom courses to meet the professional development needs of information technology (IT) professionals and managers worldwide. Learning Tree International has a market cap of $33.6 million and is part of the retail industry. Shares are down 18.1% year-to-date as of the close of trading on Monday.

TheStreet Ratings rates Learning Tree International as a sell. The company's weaknesses can be seen in multiple areas, such as its unimpressive growth in net income, weak operating cash flow and generally disappointing historical performance in the stock itself.

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Highlights from TheStreet Ratings analysis on LTRE 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 Diversified Consumer Services industry. The net income has decreased by 14.6% when compared to the same quarter one year ago, dropping from -$4.02 million to -$4.60 million.
  • Net operating cash flow has significantly decreased to -$4.36 million or 87.65% when compared to the same quarter last year. In addition, when comparing to the industry average, the firm's growth rate is much lower.
  • Reflecting the weaknesses we have cited, including the decline in the company's earnings per share, LTRE has underperformed the S&P 500 Index, declining 16.56% from its price level of one year ago. 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.
  • 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 Diversified Consumer Services industry and the overall market, LEARNING TREE INTL INC's return on equity significantly trails that of both the industry average and the S&P 500.
  • 42.87% is the gross profit margin for LEARNING TREE INTL INC which we consider to be strong. Regardless of LTRE's high profit margin, it has managed to decrease from the same period last year. Despite the mixed results of the gross profit margin, LTRE's net profit margin of -18.40% significantly underperformed when compared to the industry average.

You can view the full analysis from the report here: Learning Tree 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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