3 Specialty Retail Stocks Moving The Industry Upward

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 Specialty Retail industry as a whole closed the day up 1.4% versus the S&P 500, which was up 1.0%. Top gainers within the Specialty Retail industry included Birks Group ( BGI), up 8.4%, DGSE Companies ( DGSE), up 3.3%, Books-A-Million ( BAMM), up 2.4%, China Auto Logistics ( CALI), up 3.7% and Mecox Lane ( MCOX), up 3.3%.

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

Mecox Lane ( MCOX) is one of the companies that pushed the Specialty Retail industry higher today. Mecox Lane was up $0.14 (3.3%) to $4.42 on heavy volume. Throughout the day, 28,180 shares of Mecox Lane exchanged hands as compared to its average daily volume of 17,900 shares. The stock ranged in a price between $4.18-$4.75 after having opened the day at $4.18 as compared to the previous trading day's close of $4.28.

Mecox Lane Limited designs and sells apparel, accessories, and home and healthcare products through its online platform and stores in the People's Republic of China. Mecox Lane has a market cap of $55.7 million and is part of the services sector. Shares are up 18.4% year-to-date as of the close of trading on Thursday. Currently there are no analysts who rate Mecox Lane 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 Mecox Lane 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 and disappointing return on equity.

Highlights from TheStreet Ratings analysis on MCOX go as follows:

  • MECOX LANE LTD's earnings per share declined by 25.0% in the most recent quarter compared to the same quarter a year ago. The company has suffered a declining pattern earnings per share over the past two years. During the past fiscal year, MECOX LANE LTD reported poor results of -$2.20 versus -$1.95 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 significantly decreased by 37.3% when compared to the same quarter one year ago, falling from -$4.23 million to -$5.80 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, MECOX LANE LTD's return on equity significantly trails that of both the industry average and the S&P 500.
  • MCOX, with its decline in revenue, underperformed when compared the industry average of 4.4%. Since the same quarter one year prior, revenues slightly dropped by 8.5%. The declining revenue appears to have seeped down to the company's bottom line, decreasing earnings per share.
  • MCOX 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. Even though the company has a strong debt-to-equity ratio, the quick ratio of 0.50 is very weak and demonstrates a lack of ability to pay short-term obligations.

You can view the full analysis from the report here: Mecox Lane 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 Auto Logistics ( CALI) was up $0.08 (3.7%) to $2.24 on light volume. Throughout the day, 13,944 shares of China Auto Logistics exchanged hands as compared to its average daily volume of 20,900 shares. The stock ranged in a price between $2.11-$2.30 after having opened the day at $2.27 as compared to the previous trading day's close of $2.16.

China Auto Logistics Inc. sells and trades in imported automobiles in the People's Republic of China. It operates in five segments: Sales of Automobiles, Financing Services, Web-Based Advertising, Automobile Value Added Services, and Auto Mall Management Services. China Auto Logistics has a market cap of $8.5 million and is part of the services sector. Shares are down 41.0% year-to-date as of the close of trading on Thursday. Currently there are no analysts who rate China Auto Logistics 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 Auto Logistics 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, generally high debt management risk, disappointing return on equity and poor profit margins.

Highlights from TheStreet Ratings analysis on CALI go as follows:

  • The debt-to-equity ratio is very high at 3.22 and currently higher than the industry average, implying increased risk associated with the management of debt levels within the company. Along with the unfavorable debt-to-equity ratio, CALI maintains a poor quick ratio of 0.77, which illustrates the inability to avoid short-term cash problems.
  • Current return on equity is lower than its ROE from the same quarter one year prior. This is a clear sign of weakness within the company. Compared to other companies in the Specialty Retail industry and the overall market, CHINA AUTO LOGISTICS INC's return on equity significantly trails that of both the industry average and the S&P 500.
  • The gross profit margin for CHINA AUTO LOGISTICS INC is currently extremely low, coming in at 1.36%. It has decreased from the same quarter the previous year. Along with this, the net profit margin of -1.25% trails that of the industry average.
  • Net operating cash flow has significantly decreased to -$12.77 million or 307.94% when compared to the same quarter last year. In addition, when comparing to the industry average, the firm's growth rate is much lower.
  • CHINA AUTO LOGISTICS 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, CHINA AUTO LOGISTICS INC reported lower earnings of $0.16 versus $0.67 in the prior year.

You can view the full analysis from the report here: China Auto Logistics 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.

Books-A-Million ( BAMM) was another company that pushed the Specialty Retail industry higher today. Books-A-Million was up $0.05 (2.4%) to $2.10 on light volume. Throughout the day, 5,057 shares of Books-A-Million exchanged hands as compared to its average daily volume of 21,000 shares. The stock ranged in a price between $2.03-$2.20 after having opened the day at $2.05 as compared to the previous trading day's close of $2.05.

Books-A-Million, Inc. operates as a book retailer primarily in the eastern United States. It operates in three segments: Retail Trade, Electronic Commerce Trade, and Real Estate Development and Management. Books-A-Million has a market cap of $32.4 million and is part of the services sector. Shares are down 5.6% year-to-date as of the close of trading on Thursday. Currently there are no analysts who rate Books-A-Million a buy, no analysts rate it a sell, and none rate it a hold.

TheStreet Ratings rates Books-A-Million 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 high debt management risk.

Highlights from TheStreet Ratings analysis on BAMM go as follows:

  • BOOKS-A-MILLION 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, BOOKS-A-MILLION INC swung to a loss, reporting -$0.52 versus $0.15 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 Specialty Retail industry. The net income has significantly decreased by 50.6% when compared to the same quarter one year ago, falling from -$3.70 million to -$5.58 million.
  • Current return on equity is lower than its ROE from the same quarter one year prior. This is a clear sign of weakness within the company. Compared to other companies in the Specialty Retail industry and the overall market, BOOKS-A-MILLION INC's return on equity significantly trails that of both the industry average and the S&P 500.
  • The gross profit margin for BOOKS-A-MILLION INC is currently lower than what is desirable, coming in at 27.36%. It has decreased from the same quarter the previous year. Along with this, the net profit margin of -5.37% is significantly below that of the industry average.
  • The share price of BOOKS-A-MILLION INC has not done very well: it is down 11.92% 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. Turning toward the future, the fact that the stock has come down in price over the past year should not necessarily be interpreted as a negative; it could be one of the factors that may help make the stock attractive down the road. Right now, however, we believe that it is too soon to buy.

You can view the full analysis from the report here: Books-A-Million 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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