3 Stocks Pushing The Diversified Services Industry Lower

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The Diversified Services industry as a whole closed the day down 0.4% versus the S&P 500, which was unchanged. Laggards within the Diversified Services industry included Spar Group ( SGRP), down 4.4%, VirtualScopics ( VSCP), down 2.5%, PDI ( PDII), down 3.6%, MGT Capital Investments ( MGT), down 1.5% and Birner Dental Management Services ( BDMS), down 2.1%.

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

PDI ( PDII) is one of the companies that pushed the Diversified Services industry lower today. PDI was down $0.15 (3.6%) to $3.96 on light volume. Throughout the day, 1,124 shares of PDI exchanged hands as compared to its average daily volume of 8,900 shares. The stock ranged in price between $3.96-$4.08 after having opened the day at $3.98 as compared to the previous trading day's close of $4.11.

PDI, Inc. provides outsourced commercial services to pharmaceutical, biotechnology, and healthcare companies in the United States. PDI has a market cap of $62.9 million and is part of the services sector. Shares are down 14.6% year-to-date as of the close of trading on Friday. Currently there is 1 analyst who rates PDI a buy, no analysts rate it a sell, and 1 rates it a hold.

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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 13.40% 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

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At the close, VirtualScopics ( VSCP) was down $0.10 (2.5%) to $4.07 on light volume. Throughout the day, 2,908 shares of VirtualScopics exchanged hands as compared to its average daily volume of 6,600 shares. The stock ranged in price between $4.06-$4.14 after having opened the day at $4.06 as compared to the previous trading day's close of $4.17.

VirtualScopics, Inc. provides imaging solutions for the pharmaceutical, biotechnology, and medical device industries. VirtualScopics has a market cap of $12.5 million and is part of the services sector. Shares are up 20.6% year-to-date as of the close of trading on Friday. Currently there is 1 analyst who rates VirtualScopics a buy, no analysts rate it a sell, and none rate it a hold.

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TheStreet Ratings rates VirtualScopics as a sell. The company's weaknesses can be seen in multiple areas, such as its poor profit margins and generally disappointing historical performance in the stock itself.

Highlights from TheStreet Ratings analysis on VSCP go as follows:

  • The gross profit margin for VIRTUALSCOPICS INC is currently lower than what is desirable, coming in at 32.24%. Regardless of VSCP's low profit margin, it has managed to increase from the same period last year. Despite the mixed results of the gross profit margin, VSCP's net profit margin of -27.44% significantly underperformed when compared to the industry average.
  • VSCP has underperformed the S&P 500 Index, declining 13.98% from its price level of one year ago. 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.
  • Current return on equity exceeded its ROE from the same quarter one year prior. This is a clear sign of strength within the company. Compared to other companies in the Life Sciences Tools & Services industry and the overall market, VIRTUALSCOPICS INC's return on equity significantly trails that of both the industry average and the S&P 500.
  • VSCP, with its decline in revenue, underperformed when compared the industry average of 21.6%. Since the same quarter one year prior, revenues slightly dropped by 7.1%. The declining revenue has not hurt the company's bottom line, with increasing earnings per share.
  • VIRTUALSCOPICS INC has improved earnings per share by 42.5% 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. During the past fiscal year, VIRTUALSCOPICS INC continued to lose money by earning -$1.02 versus -$1.10 in the prior year.

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

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Spar Group ( SGRP) was another company that pushed the Diversified Services industry lower today. Spar Group was down $0.06 (4.4%) to $1.30 on heavy volume. Throughout the day, 34,215 shares of Spar Group exchanged hands as compared to its average daily volume of 7,900 shares. The stock ranged in price between $1.27-$1.30 after having opened the day at $1.30 as compared to the previous trading day's close of $1.36.

SPAR Group Inc., together with its subsidiaries, provides merchandising and other marketing services worldwide. Spar Group has a market cap of $28.3 million and is part of the services sector. Shares are down 31.3% year-to-date as of the close of trading on Friday.

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.

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Highlights from TheStreet Ratings analysis on SGRP go as follows:

  • Despite its growing revenue, the company underperformed as compared with the industry average of 12.5%. 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.

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