3 Stocks Driving The Retail 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.

All three major indices are trading down today with the Dow Jones Industrial Average ( ^DJI) trading down 112.47 points (-0.7%) at 16,912 as of Tuesday, July 8, 2014, 3:55 PM ET. The NYSE advances/declines ratio sits at 1,204 issues advancing vs. 1,839 declining with 128 unchanged.

The Retail industry as a whole closed the day down 1.4% versus the S&P 500, which was down 0.7%. Top gainers within the Retail industry included Acorn International ( ATV), up 5.5%, China Jo-Jo Drugstores ( CJJD), up 2.4% and Kirkland's ( KIRK), up 2.2%.

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

Kirkland's ( KIRK) is one of the companies that pushed the Retail industry higher today. Kirkland's was up $0.40 (2.2%) to $18.19 on light volume. Throughout the day, 107,328 shares of Kirkland's exchanged hands as compared to its average daily volume of 148,100 shares. The stock ranged in a price between $17.56-$18.29 after having opened the day at $17.70 as compared to the previous trading day's close of $17.79.

Kirkland's, Inc. operates as a specialty retailer of home decor and gifts in the United States. Kirkland's has a market cap of $315.7 million and is part of the services sector. Shares are down 24.8% year-to-date as of the close of trading on Monday. Currently there are 4 analysts who rate Kirkland's 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 Kirkland's as a buy. 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, reasonable valuation levels, growth in earnings per share and expanding profit margins. We feel these strengths outweigh the fact that the company has had somewhat disappointing return on equity.

Highlights from TheStreet Ratings analysis on KIRK go as follows:

  • KIRK's revenue growth has slightly outpaced the industry average of 1.4%. Since the same quarter one year prior, revenues slightly increased by 6.9%. This growth in revenue appears to have trickled down to the company's bottom line, improving the earnings per share.
  • KIRK 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. To add to this, KIRK has a quick ratio of 1.91, which demonstrates the ability of the company to cover short-term liquidity needs.
  • KIRKLAND'S INC has improved earnings per share by 20.0% 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. We feel that this trend should continue. During the past fiscal year, KIRKLAND'S INC increased its bottom line by earning $0.82 versus $0.79 in the prior year. This year, the market expects an improvement in earnings ($0.99 versus $0.82).
  • 39.35% is the gross profit margin for KIRKLAND'S 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 1.89% trails the industry average.

You can view the full analysis from the report here: Kirkland's 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, China Jo-Jo Drugstores ( CJJD) was up $0.04 (2.4%) to $1.64 on light volume. Throughout the day, 4,405 shares of China Jo-Jo Drugstores exchanged hands as compared to its average daily volume of 43,400 shares. The stock ranged in a price between $1.60-$1.64 after having opened the day at $1.60 as compared to the previous trading day's close of $1.60.

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 $24.4 million and is part of the services sector. Shares are up 76.0% year-to-date as of the close of trading on Monday. Currently there are no analysts who rate China Jo-Jo Drugstores 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 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's earnings per share declined by 48.6% 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, CHINA JO-JO DRUGSTORES INC reported poor results of -$1.81 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 Food & Staples Retailing industry. The net income has significantly decreased by 55.1% when compared to the same quarter one year ago, falling from -$9.85 million to -$15.29 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 3.64%. It has decreased significantly from the same period last year. Along with this, the net profit margin of -94.77% is significantly below that of the industry average.
  • Net operating cash flow has declined marginally to $1.37 million or 6.22% 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.

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 higher today. Acorn International was up $0.11 (5.5%) to $2.15 on light volume. Throughout the day, 5,177 shares of Acorn International exchanged hands as compared to its average daily volume of 16,500 shares. The stock ranged in a price between $2.10-$2.19 after having opened the day at $2.10 as compared to the previous trading day's close of $2.04.

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 $53.0 million and is part of the services sector. Shares are up 31.4% year-to-date as of the close of trading on Monday. Currently there are no analysts who rate Acorn International a buy, no analysts rate it a sell, and none rate it a hold.

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.

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 19.58% 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.

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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