3 Stocks Pushing The Services Sector 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.

One out of the three major indices traded up today The three major indices are trading lower today with the Dow Jones Industrial Average ( ^DJI) trading down 1.09 points (0.0%) at 17,086 as of Thursday, July 24, 2014, 3:55 PM ET. The NYSE advances/declines ratio sits at 1,410 issues advancing vs. 1,558 declining with 167 unchanged.

The Services sector as a whole closed the day down 0.1% versus the S&P 500, which was up 0.1%. Top gainers within the Services sector included Taitron Components ( TAIT), up 5.0%, QKL Stores ( QKLS), up 3.6%, Spar Group ( SGRP), up 3.7%, Radiant Logistics ( RLGT), up 4.0% and Sino-Global Shipping America ( SINO), up 4.6%.

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

Radiant Logistics ( RLGT) is one of the companies that pushed the Services sector higher today. Radiant Logistics was up $0.12 (4.0%) to $3.12 on heavy volume. Throughout the day, 8,975 shares of Radiant Logistics exchanged hands as compared to its average daily volume of 3,900 shares. The stock ranged in a price between $3.00-$3.15 after having opened the day at $3.00 as compared to the previous trading day's close of $3.00.

Radiant Logistics, Inc. operates as a non-asset based transportation and logistic services company in the United States and internationally. Radiant Logistics has a market cap of $105.1 million and is part of the transportation industry. Shares are up 11.9% year-to-date as of the close of trading on Wednesday. Currently there is 1 analyst who rates Radiant 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 Radiant Logistics as a buy. The company's strengths can be seen in multiple areas, such as its revenue growth, largely solid financial position with reasonable debt levels by most measures, compelling growth in net income, solid stock price performance and impressive record of earnings per share growth. We feel these strengths outweigh the fact that the company has had somewhat disappointing return on equity.

Highlights from TheStreet Ratings analysis on RLGT go as follows:

  • The revenue growth came in higher than the industry average of 3.4%. Since the same quarter one year prior, revenues rose by 18.2%. This growth in revenue appears to have trickled down to the company's bottom line, improving the earnings per share.
  • RLGT'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. Along with the favorable debt-to-equity ratio, the company maintains an adequate quick ratio of 1.19, which illustrates the ability to avoid short-term cash problems.
  • The net income growth from the same quarter one year ago has significantly exceeded that of the S&P 500 and the Air Freight & Logistics industry. The net income increased by 86.8% when compared to the same quarter one year prior, rising from $0.88 million to $1.65 million.
  • Powered by its strong earnings growth of 50.00% and other important driving factors, this stock has surged by 61.90% over the past year, outperforming the rise in the S&P 500 Index during the same period. Looking ahead, the stock's sharp rise over the last year has already helped drive it to a level which is relatively expensive compared to the rest of its industry. We feel, however, that other strengths this company displays justify these higher price levels.
  • RADIANT LOGISTICS INC 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. However, we anticipate underperformance relative to this pattern in the coming year. During the past fiscal year, RADIANT LOGISTICS INC increased its bottom line by earning $0.10 versus $0.06 in the prior year. For the next year, the market is expecting a contraction of 10.0% in earnings ($0.09 versus $0.10).

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

At the close, Spar Group ( SGRP) was up $0.05 (3.7%) to $1.40 on heavy volume. Throughout the day, 13,365 shares of Spar Group exchanged hands as compared to its average daily volume of 6,400 shares. The stock ranged in a price between $1.38-$1.44 after having opened the day at $1.42 as compared to the previous trading day's close of $1.35.

SPAR Group Inc., together with its subsidiaries, provides merchandising and other marketing services worldwide. Spar Group has a market cap of $29.7 million and is part of the transportation industry. Shares are down 31.8% year-to-date as of the close of trading on Wednesday. Currently there are no analysts who rate Spar Group 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 Spar Group as a hold. The company's strengths can be seen in multiple areas, such as its revenue growth, largely solid financial position with reasonable debt levels by most measures and reasonable valuation levels. However, as a counter to these strengths, we also find weaknesses including unimpressive growth in net income, poor profit margins and weak operating cash flow.

Highlights from TheStreet Ratings analysis on SGRP go as follows:

  • Despite its growing revenue, the company underperformed as compared with the industry average of 14.7%. Since the same quarter one year prior, revenues rose by 12.2%. This growth in revenue does not appear to have trickled down to the company's bottom line, displayed by a decline in earnings per share.
  • SGRP's debt-to-equity ratio is very low at 0.24 and is currently below that of the industry average, implying that there has been very successful management of debt levels. To add to this, SGRP has a quick ratio of 2.08, which demonstrates the ability of the company to cover short-term liquidity needs.
  • SPAR GROUP INC's earnings have gone downhill when comparing its most recently reported quarter with the same quarter a year earlier. This company has not demonstrated a clear trend in earnings over the past 2 years, making it difficult to accurately predict earnings for the coming year. During the past fiscal year, SPAR GROUP INC increased its bottom line by earning $0.15 versus $0.13 in the prior year.
  • Net operating cash flow has significantly decreased to $2.47 million or 50.56% 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 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 938.6% when compared to the same quarter one year ago, falling from $0.04 million to -$0.37 million.

You can view the full analysis from the report here: Spar Group 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.

QKL Stores ( QKLS) was another company that pushed the Services sector higher today. QKL Stores was up $0.10 (3.6%) to $2.86 on average volume. Throughout the day, 3,470 shares of QKL Stores exchanged hands as compared to its average daily volume of 2,900 shares. The stock ranged in a price between $2.83-$2.86 after having opened the day at $2.85 as compared to the previous trading day's close of $2.76.

QKL Stores Inc., through its subsidiaries, engages in the operation of retail chain stores in the People's Republic of China. The company's supermarkets and hypermarkets sell a selection of merchandise, including groceries, fresh food, and non-food items. QKL Stores has a market cap of $4.6 million and is part of the transportation industry. Shares are down 34.3% year-to-date as of the close of trading on Wednesday. Currently there are no analysts who rate QKL Stores a buy, no analysts rate it a sell, and none rate it a hold.

TheStreet Ratings rates QKL Stores 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 high debt management risk and generally disappointing historical performance in the stock itself.

Highlights from TheStreet Ratings analysis on QKLS 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 Food & Staples Retailing industry. The net income has significantly decreased by 858.3% when compared to the same quarter one year ago, falling from $0.40 million to -$3.06 million.
  • The gross profit margin for QKL STORES INC is rather low; currently it is at 17.12%. It has decreased from the same quarter the previous year. Along with this, the net profit margin of -3.55% trails that of the industry average.
  • Net operating cash flow has decreased to $18.00 million or 25.83% 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.
  • QKLS's debt-to-equity ratio of 0.88 is somewhat low overall, but it is high when compared to the industry average, implying that the management of the debt levels should be evaluated further. Even though the debt-to-equity ratio shows mixed results, the company's quick ratio of 0.47 is very low and demonstrates very weak liquidity.
  • The share price of QKL STORES INC has not done very well: it is down 14.29% 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: QKL Stores 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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