3 Stocks Driving The Specialty Retail Industry Higher

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All three major indices traded up today with the Dow Jones Industrial Average ( ^DJI) trading up 62 points (0.4%) at 17,114 as of Tuesday, July 22, 2014, 3:55 PM ET. The NYSE advances/declines ratio sits at 2,161 issues advancing vs. 822 declining with 149 unchanged.

The Specialty 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 Specialty Retail industry included Sport Chalet ( SPCHB), up 2.6%, China Auto Logistics ( CALI), up 5.6%, Mecox Lane ( MCOX), up 3.7%, Lentuo International ( LAS), up 3.1% and Rush ( RUSHB), up 2.8%.

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 $0.16 (3.7%) to $4.45 on light volume. Throughout the day, 10,887 shares of Mecox Lane exchanged hands as compared to its average daily volume of 17,900 shares. The stock ranged in a price between $4.30-$4.69 after having opened the day at $4.32 as compared to the previous trading day's close of $4.29.

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 17.5% year-to-date as of the close of trading on Monday. Currently there are no analysts who rate Mecox Lane a buy, no analysts rate it a sell, and none rate it a hold.

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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 4.8%. 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

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