3 Retail Stocks Driving The 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 traded up today with the Dow Jones Industrial Average ( ^DJI) trading up 110 points (0.6%) at 17,054 as of Monday, July 14, 2014, 3:55 PM ET. The NYSE advances/declines ratio sits at 2,026 issues advancing vs. 1,002 declining with 139 unchanged.

The Retail industry as a whole closed the day up 0.1% versus the S&P 500, which was up 0.5%. Top gainers within the Retail industry included Appliance Recycling Centers Of America ( ARCI), up 3.6%, U S Auto Parts Network ( PRTS), up 2.1%, Cherokee ( CHKE), up 2.6%, Liberator Medical Holdings ( LBMH), up 2.4% and PC Connection ( PCCC), up 1.8%.

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

Cherokee ( CHKE) is one of the companies that pushed the Retail industry higher today. Cherokee was up $0.40 (2.6%) to $15.56 on average volume. Throughout the day, 52,797 shares of Cherokee exchanged hands as compared to its average daily volume of 39,400 shares. The stock ranged in a price between $15.01-$15.60 after having opened the day at $15.10 as compared to the previous trading day's close of $15.16.

Cherokee Inc. markets, manages, and licenses fashion and lifestyle brands that it owns or represents for apparel, footwear, home, and accessories worldwide. Cherokee has a market cap of $127.6 million and is part of the services sector. Shares are up 10.0% year-to-date as of the close of trading on Friday. Currently there is 1 analyst who rates Cherokee a buy, no analysts rate it a sell, and none rate it a hold.

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TheStreet Ratings rates Cherokee as a buy. The company's strengths can be seen in multiple areas, such as its revenue growth, solid stock price performance, compelling growth in net income, expanding profit margins and impressive record of earnings per share growth. We feel these strengths outweigh the fact that the company shows weak operating cash flow.

Highlights from TheStreet Ratings analysis on CHKE go as follows:

  • The revenue growth came in higher than the industry average of 8.4%. Since the same quarter one year prior, revenues rose by 23.7%. Growth in the company's revenue appears to have helped boost the earnings per share.
  • 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. Turning our attention to the future direction of the stock, it goes without saying that even the best stocks can fall in an overall down market. However, in any other environment, this stock still has good upside potential despite the fact that it has already risen in the past year.
  • The net income growth from the same quarter one year ago has significantly exceeded that of the S&P 500 and the Textiles, Apparel & Luxury Goods industry. The net income increased by 121.5% when compared to the same quarter one year prior, rising from $1.62 million to $3.59 million.
  • The gross profit margin for CHEROKEE INC/DE is rather high; currently it is at 55.22%. It has increased from the same quarter the previous year. Along with this, the net profit margin of 36.06% significantly outperformed against the industry average.
  • CHEROKEE INC/DE reported significant earnings per share improvement in the most recent quarter compared to the same quarter a year ago. This company has reported somewhat volatile earnings recently. But, we feel it is poised for EPS growth in the coming year. During the past fiscal year, CHEROKEE INC/DE reported lower earnings of $0.72 versus $0.82 in the prior year. This year, the market expects an improvement in earnings ($1.08 versus $0.72).

You can view the full analysis from the report here: Cherokee 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, U S Auto Parts Network ( PRTS) was up $0.07 (2.1%) to $3.46 on light volume. Throughout the day, 67,547 shares of U S Auto Parts Network exchanged hands as compared to its average daily volume of 128,900 shares. The stock ranged in a price between $3.25-$3.49 after having opened the day at $3.36 as compared to the previous trading day's close of $3.39.

U.S. Auto Parts Network, Inc., together with its subsidiaries, operates as an online retailer of automotive aftermarket parts and accessories primarily in the United States, Canada, and the Philippines. It operates in two segments, Base USAP and AutoMD. U S Auto Parts Network has a market cap of $119.0 million and is part of the services sector. Shares are up 36.7% year-to-date as of the close of trading on Friday. Currently there is 1 analyst who rates U S Auto Parts Network 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 U S Auto Parts Network as a sell. The company's weaknesses can be seen in multiple areas, such as its generally high debt management risk and poor profit margins.

Highlights from TheStreet Ratings analysis on PRTS go as follows:

  • Despite currently having a low debt-to-equity ratio of 0.49, it is higher than that of the industry average, inferring that management of debt levels may need to be evaluated further. Even though the debt-to-equity ratio shows mixed results, the company's quick ratio of 0.18 is very low and demonstrates very weak liquidity.
  • The gross profit margin for US AUTO PARTS NETWORK INC is currently lower than what is desirable, coming in at 30.43%. Regardless of PRTS'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 0.29% trails the industry average.
  • 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 Internet & Catalog Retail industry and the overall market, US AUTO PARTS NETWORK INC's return on equity significantly trails that of both the industry average and the S&P 500.
  • Net operating cash flow has significantly increased by 508.06% to $8.14 million when compared to the same quarter last year. In addition, US AUTO PARTS NETWORK INC has also vastly surpassed the industry average cash flow growth rate of 16.23%.
  • This stock has increased by 242.30% over the past year, outperforming the rise in the S&P 500 Index during the same period. Regarding the future course of this stock, we feel that the risks involved in investing in PRTS do not compensate for any future upside potential, despite the fact that it has seen nice gains over the past 12 months.

You can view the full analysis from the report here: U S Auto Parts Network 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.

Appliance Recycling Centers Of America ( ARCI) was another company that pushed the Retail industry higher today. Appliance Recycling Centers Of America was up $0.14 (3.6%) to $3.99 on light volume. Throughout the day, 10,923 shares of Appliance Recycling Centers Of America exchanged hands as compared to its average daily volume of 49,600 shares. The stock ranged in a price between $3.77-$4.03 after having opened the day at $3.78 as compared to the previous trading day's close of $3.85.

Appliance Recycling Centers of America, Inc., together with its subsidiaries, sells new household appliances through a chain of company-owned retail stores under the ApplianceSmart name. The company operates in two segments, Recycling and Retail. Appliance Recycling Centers Of America has a market cap of $21.5 million and is part of the services sector. Shares are up 34.5% year-to-date as of the close of trading on Friday. Currently there are no analysts who rate Appliance Recycling Centers Of America a buy, no analysts rate it a sell, and none rate it a hold.

TheStreet Ratings rates Appliance Recycling Centers Of America as a hold. The company's strengths can be seen in multiple areas, such as its revenue growth, solid stock price performance and notable return on equity. 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 ARCI go as follows:

  • The revenue growth came in higher than the industry average of 0.9%. Since the same quarter one year prior, revenues rose by 10.1%. Growth in the company's revenue appears to have helped boost the earnings per share.
  • Powered by its strong earnings growth of 466.66% and other important driving factors, this stock has surged by 52.61% over the past year, outperforming the rise in the S&P 500 Index during the same period. Regarding the stock's future course, our hold rating indicates that we do not recommend additional investment in this stock despite its gains in the past year.
  • APPLIANCE RECYCLING CTR AMER 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, APPLIANCE RECYCLING CTR AMER turned its bottom line around by earning $0.57 versus -$0.69 in the prior year.
  • The gross profit margin for APPLIANCE RECYCLING CTR AMER is currently lower than what is desirable, coming in at 29.20%. Regardless of ARCI'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 2.89% trails the industry average.
  • Net operating cash flow has decreased to $2.63 million or 39.00% 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: Appliance Recycling Centers Of America 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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