3 Stocks Improving Performance Of The Services Sector

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 69.58 points (-0.4%) at 16,916 as of Thursday, July 10, 2014, 3:55 PM ET. The NYSE advances/declines ratio sits at 1,051 issues advancing vs. 1,940 declining with 176 unchanged.

The Services sector as a whole closed the day down 0.9% versus the S&P 500, which was down 0.4%. Top gainers within the Services sector included Bowl America ( BWL.A), up 4.3%, RLJ Entertainment ( RLJE), up 3.4%, Lime Energy ( LIME), up 2.2%, Command Security ( MOC), up 2.8% and Coast Distribution System ( CRV), up 1.6%.

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

Command Security ( MOC) is one of the companies that pushed the Services sector higher today. Command Security was up $0.05 (2.8%) to $1.85 on light volume. Throughout the day, 600 shares of Command Security exchanged hands as compared to its average daily volume of 9,000 shares. The stock ranged in a price between $1.85-$1.85 after having opened the day at $1.85 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. The company operates through Security and Aviation Safeguards divisions. Command Security has a market cap of $16.9 million and is part of the retail industry. 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 solid stock price performance, impressive record of earnings per share growth and compelling growth in net income. However, as a counter to these strengths, we find that the company's profit margins have been poor overall.

Highlights from TheStreet Ratings analysis on MOC go as follows:

  • Compared to where it was a year ago today, the stock is now trading at a higher level, reflecting both the market's overall trend during that period and the fact that the company's earnings growth has been robust. Looking ahead, our view is that this company's fundamentals will not have much impact in either direction, allowing the stock to generally move up or down based on the push and pull of the broad market.
  • 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 two years. During the past fiscal year, COMMAND SECURITY CORP increased its bottom line by earning $0.12 versus $0.04 in the prior year.
  • The return on equity has improved slightly when compared to the same quarter one year prior. This can be construed as a modest strength in the organization. When compared to other companies in the Commercial Services & Supplies industry and the overall market, COMMAND SECURITY CORP's return on equity is below that of both the industry average and the S&P 500.
  • The gross profit margin for COMMAND SECURITY CORP is currently extremely low, coming in at 13.03%. It has decreased from the same quarter the previous year. Along with this, the net profit margin of -0.35% trails that of the industry average.

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.

At the close, Lime Energy ( LIME) was up $0.05 (2.2%) to $2.37 on light volume. Throughout the day, 752 shares of Lime Energy exchanged hands as compared to its average daily volume of 6,500 shares. The stock ranged in a price between $2.32-$2.37 after having opened the day at $2.37 as compared to the previous trading day's close of $2.32.

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 $9.1 million and is part of the retail industry. Shares are down 15.2% 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 48.62%, 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.

RLJ Entertainment ( RLJE) was another company that pushed the Services sector higher today. RLJ Entertainment was up $0.12 (3.4%) to $3.64 on average volume. Throughout the day, 5,003 shares of RLJ Entertainment exchanged hands as compared to its average daily volume of 3,900 shares. The stock ranged in a price between $3.48-$3.64 after having opened the day at $3.49 as compared to the previous trading day's close of $3.52.

RLJ Entertainment, Inc., an entertainment company, acquires content rights in British episodic mystery and drama, urban programming, and full-length motion pictures. It operates through three segments: Intellectual Property Licensing, Wholesale, and Direct-to-Consumer. RLJ Entertainment has a market cap of $49.8 million and is part of the retail industry. Shares are down 26.5% year-to-date as of the close of trading on Wednesday. Currently there are no analysts who rate RLJ Entertainment a buy, no analysts rate it a sell, and none rate it a hold.

TheStreet Ratings rates RLJ Entertainment 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 generally disappointing historical performance in the stock itself.

Highlights from TheStreet Ratings analysis on RLJE go as follows:

  • RLJ ENTERTAINMENT 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, RLJ ENTERTAINMENT INC reported poor results of -$2.30 versus -$0.49 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 Media industry. The net income has significantly decreased by 183.1% when compared to the same quarter one year ago, falling from -$3.56 million to -$10.07 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 Media industry and the overall market, RLJ ENTERTAINMENT INC's return on equity significantly trails that of both the industry average and the S&P 500.
  • The gross profit margin for RLJ ENTERTAINMENT INC is rather low; currently it is at 20.04%. It has decreased significantly from the same period last year. Along with this, the net profit margin of -33.26% is significantly below that of the industry average.
  • The share price of RLJ ENTERTAINMENT INC has not done very well: it is down 24.19% 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: RLJ Entertainment 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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