3 Stocks Driving The Diversified Services 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 115 points (0.7%) at 17,091 as of Friday, July 18, 2014, 3:55 PM ET. The NYSE advances/declines ratio sits at 2,387 issues advancing vs. 565 declining with 160 unchanged.

The Diversified Services industry as a whole closed the day up 1.2% versus the S&P 500, which was up 1.0%. Top gainers within the Diversified Services industry included Magal Security Systems ( MAGS), up 6.0%, PDI ( PDII), up 2.0%, Bioanalytical Systems ( BASI), up 3.1%, AeroCentury ( ACY), up 2.2% and ATA ( ATAI), up 2.1%.

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

Bioanalytical Systems ( BASI) is one of the companies that pushed the Diversified Services industry higher today. Bioanalytical Systems was up $0.07 (3.1%) to $2.34 on heavy volume. Throughout the day, 63,704 shares of Bioanalytical Systems exchanged hands as compared to its average daily volume of 10,300 shares. The stock ranged in a price between $2.27-$2.45 after having opened the day at $2.27 as compared to the previous trading day's close of $2.27.

Bioanalytical Systems, Inc. provides drug discovery and development services, and analytical instruments for pharmaceutical, biotechnology, academic, and government organizations in North America, the Pacific Rim, Europe, and internationally. Bioanalytical Systems has a market cap of $20.2 million and is part of the services sector. Shares are down 7.7% year-to-date as of the close of trading on Thursday. Currently there are no analysts who rate Bioanalytical Systems 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 Bioanalytical Systems as a sell. The area that we feel has been the company's primary weakness has been its unimpressive growth in net income.

Highlights from TheStreet Ratings analysis on BASI go as follows:

  • The company, on the basis of net income growth from the same quarter one year ago, has significantly underperformed compared to the Life Sciences Tools & Services industry average, but is greater than that of the S&P 500. The net income increased by 29.6% when compared to the same quarter one year prior, rising from -$0.31 million to -$0.22 million.
  • 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 Life Sciences Tools & Services industry and the overall market, BIOANALYTICAL SYSTEMS INC's return on equity significantly trails that of both the industry average and the S&P 500.
  • The current debt-to-equity ratio, 0.58, is low and is below the industry average, implying that there has been successful management of debt levels. Even though the company has a strong debt-to-equity ratio, the quick ratio of 0.30 is very weak and demonstrates a lack of ability to pay short-term obligations.
  • 40.75% is the gross profit margin for BIOANALYTICAL SYSTEMS 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 -3.70% is in-line with the industry average.
  • Net operating cash flow has significantly increased by 85.51% to -$0.03 million when compared to the same quarter last year. In addition, BIOANALYTICAL SYSTEMS INC has also vastly surpassed the industry average cash flow growth rate of -48.22%.

You can view the full analysis from the report here: Bioanalytical Systems 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, PDI ( PDII) was up $0.08 (2.0%) to $4.08 on heavy volume. Throughout the day, 51,910 shares of PDI exchanged hands as compared to its average daily volume of 5,700 shares. The stock ranged in a price between $3.95-$4.09 after having opened the day at $3.95 as compared to the previous trading day's close of $4.00.

PDI, Inc. provides outsourced commercial services to pharmaceutical, biotechnology, and healthcare companies in the United States. PDI has a market cap of $62.1 million and is part of the services sector. Shares are down 15.8% year-to-date as of the close of trading on Thursday. Currently there is 1 analyst who rates PDI a buy, no analysts rate it a sell, and 1 rates 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 PDI 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 disappointing historical performance in the stock itself and feeble growth in its earnings per share.

Highlights from TheStreet Ratings analysis on PDII 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 Health Care Providers & Services industry. The net income has significantly decreased by 175.8% when compared to the same quarter one year ago, falling from $2.13 million to -$1.61 million.
  • The gross profit margin for PDI INC is rather low; currently it is at 16.98%. It has decreased from the same quarter the previous year. Along with this, the net profit margin of -4.91% trails that of the industry average.
  • Net operating cash flow has significantly decreased to -$6.46 million or 628.88% 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 share price of PDI INC has not done very well: it is down 7.37% 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.
  • PDI 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. This company has reported somewhat volatile earnings recently. We feel it is likely to report a decline in earnings in the coming year. During the past fiscal year, PDI INC continued to lose money by earning -$0.31 versus -$1.75 in the prior year. For the next year, the market is expecting a contraction of 32.3% in earnings (-$0.41 versus -$0.31).

You can view the full analysis from the report here: PDI 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.

Magal Security Systems ( MAGS) was another company that pushed the Diversified Services industry higher today. Magal Security Systems was up $0.21 (6.0%) to $3.68 on heavy volume. Throughout the day, 33,046 shares of Magal Security Systems exchanged hands as compared to its average daily volume of 6,300 shares. The stock ranged in a price between $3.46-$3.77 after having opened the day at $3.46 as compared to the previous trading day's close of $3.47.

Magal Security Systems Ltd. develops, manufactures, and sells safety, security, site management, and intelligence gathering and compilation solutions and products worldwide. It operates through: Perimeter Products, Turnkey Projects, and Cyber segments. Magal Security Systems has a market cap of $55.4 million and is part of the services sector. Shares are down 3.7% year-to-date as of the close of trading on Thursday. Currently there are no analysts who rate Magal Security Systems a buy, no analysts rate it a sell, and none rate it a hold.

TheStreet Ratings rates Magal Security Systems as a hold. The company's strengths can be seen in multiple areas, such as its largely solid financial position with reasonable debt levels by most measures and increase in stock price during the past year. However, as a counter to these strengths, we also find weaknesses including feeble growth in the company's earnings per share, deteriorating net income and disappointing return on equity.

Highlights from TheStreet Ratings analysis on MAGS go as follows:

  • MAGS's debt-to-equity ratio is very low at 0.15 and is currently below that of the industry average, implying that there has been very successful management of debt levels. To add to this, MAGS has a quick ratio of 2.35, which demonstrates the ability of the company to cover short-term liquidity needs.
  • MAGS, with its decline in revenue, underperformed when compared the industry average of 9.4%. Since the same quarter one year prior, revenues slightly dropped by 7.0%. The declining revenue appears to have seeped down to the company's bottom line, decreasing earnings per share.
  • 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 Electronic Equipment, Instruments & Components industry and the overall market, MAGAL SECURITY SYSTEMS's return on equity significantly trails that of both the industry average and the S&P 500.
  • The gross profit margin for MAGAL SECURITY SYSTEMS is currently lower than what is desirable, coming in at 32.68%. It has decreased from the same quarter the previous year. Along with this, the net profit margin of -15.78% is significantly below that of the industry average.

You can view the full analysis from the report here: Magal Security Systems 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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