3 Stocks Pushing The Specialty Retail Industry Lower

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The Specialty Retail industry as a whole closed the day down 1.0% versus the S&P 500, which was down 0.6%. Laggards within the Specialty Retail industry included DGSE Companies ( DGSE), down 2.7%, Mecox Lane ( MCOX), down 3.4%, Lentuo International ( LAS), down 4.7%, West Marine ( WMAR), down 4.5% and 1-800 Flowers.com ( FLWS), down 2.0%.

TheStreet Ratings Group would like to highlight 3 stocks that pushed the industry lower today:

West Marine ( WMAR) is one of the companies that pushed the Specialty Retail industry lower today. West Marine was down $0.40 (4.5%) to $8.41 on heavy volume. Throughout the day, 106,558 shares of West Marine exchanged hands as compared to its average daily volume of 55,500 shares. The stock ranged in price between $8.37-$8.86 after having opened the day at $8.70 as compared to the previous trading day's close of $8.81.

West Marine, Inc. operates as a specialty retailer of boating supplies, gear, apparel, footwear, and other water life-related products primarily in the United States. West Marine has a market cap of $230.5 million and is part of the consumer goods sector. Shares are down 38.1% year-to-date as of the close of trading on Thursday. Currently there is 1 analyst who rates West Marine a buy, no analysts rate it a sell, and none rate it a hold.

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TheStreet Ratings rates West Marine as a hold. The company's strengths can be seen in multiple areas, such as its good cash flow from operations and largely solid financial position with reasonable debt levels by most measures. However, as a counter to these strengths, we also find weaknesses including a generally disappointing performance in the stock itself, deteriorating net income and disappointing return on equity.

Highlights from TheStreet Ratings analysis on WMAR go as follows:

  • Net operating cash flow has increased to -$27.75 million or 27.74% when compared to the same quarter last year. The firm also exceeded the industry average cash flow growth rate of -3.74%.
  • WMAR 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 0.22 is very weak and demonstrates a lack of ability to pay short-term obligations.
  • Regardless of the drop in revenue, the company managed to outperform against the industry average of 1.0%. Since the same quarter one year prior, revenues slightly dropped by 0.8%. The declining revenue appears to have seeped down to the company's bottom line, decreasing earnings per share.
  • The company, on the basis of change in net income from the same quarter one year ago, has underperformed when compared to that of the S&P 500 and the Specialty Retail industry average. The net income has decreased by 13.2% when compared to the same quarter one year ago, dropping from -$9.73 million to -$11.02 million.
  • Reflecting the weaknesses we have cited, including the decline in the company's earnings per share, WMAR has underperformed the S&P 500 Index, declining 19.12% from its price level of one year ago. Looking ahead, we do not see anything in this company's numbers that would change the one-year trend. It was down over the last twelve months; and it could be down again in the next twelve. Naturally, a bull or bear market could sway the movement of this stock.

You can view the full analysis from the report here: West Marine Ratings Report

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At the close, Lentuo International ( LAS) was down $0.11 (4.7%) to $2.22 on light volume. Throughout the day, 29,166 shares of Lentuo International exchanged hands as compared to its average daily volume of 85,900 shares. The stock ranged in price between $2.20-$2.35 after having opened the day at $2.35 as compared to the previous trading day's close of $2.33.

Lentuo International Inc. operates automobile franchise dealerships in the People's Republic of China. Lentuo International has a market cap of $74.6 million and is part of the consumer goods sector. Shares are down 15.3% year-to-date as of the close of trading on Thursday.

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TheStreet Ratings rates Lentuo International as a hold. The company's strengths can be seen in multiple areas, such as its revenue growth, impressive record of earnings per share growth and compelling growth in net income. However, as a counter to these strengths, we also find weaknesses including generally higher debt management risk, a generally disappointing performance in the stock itself and poor profit margins.

Highlights from TheStreet Ratings analysis on LAS go as follows:

  • The revenue growth came in higher than the industry average of 1.0%. Since the same quarter one year prior, revenues rose by 11.6%. This growth in revenue appears to have trickled down to the company's bottom line, improving the earnings per share.
  • LENTUO INTERNATIONAL -ADR 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. We feel that this trend should continue. This trend suggests that the performance of the business is improving. During the past fiscal year, LENTUO INTERNATIONAL -ADR turned its bottom line around by earning $0.12 versus -$0.03 in the prior year. This year, the market expects an improvement in earnings ($0.34 versus $0.12).
  • LAS's stock share price has done very poorly compared to where it was a year ago: Despite any rallies, the net result is that it is down by 56.15%, which is also worse that the performance of the S&P 500 Index. Investors have so far failed to pay much attention to the earnings improvements the company has managed to achieve over the last quarter. Naturally, the overall market trend is bound to be a significant factor. However, in one sense, the stock's sharp decline last year is a positive for future investors, making it cheaper (in proportion to its earnings over the past year) than most other stocks in its industry. But due to other concerns, we feel the stock is still not a good buy right now.
  • The debt-to-equity ratio of 1.38 is relatively high when compared with the industry average, suggesting a need for better debt level management. Along with this, the company manages to maintain a quick ratio of 0.29, which clearly demonstrates the inability to cover short-term cash needs.

You can view the full analysis from the report here: Lentuo International Ratings Report

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Mecox Lane ( MCOX) was another company that pushed the Specialty Retail industry lower today. Mecox Lane was down $0.15 (3.4%) to $4.23 on light volume. Throughout the day, 9,024 shares of Mecox Lane exchanged hands as compared to its average daily volume of 18,600 shares. The stock ranged in price between $4.19-$4.44 after having opened the day at $4.27 as compared to the previous trading day's close of $4.38.

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 $55.5 million and is part of the consumer goods sector. Shares are up 20.0% year-to-date as of the close of trading on Thursday.

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.

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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

STOCKS TO BUY: TheStreet Quant Ratings has identified a handful of stocks that can potentially TRIPLE in the next 12 months. Learn more.

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