3 Retail Stocks Driving The Industry 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.

All three major indices are trading down today with the Dow Jones Industrial Average ( ^DJI) trading down 55.93 points (-0.3%) at 16,507 as of Friday, Aug. 1, 2014, 3:55 PM ET. The NYSE advances/declines ratio sits at 1,028 issues advancing vs. 2,012 declining with 122 unchanged.

The Retail industry as a whole closed the day down 0.6% versus the S&P 500, which was down 0.1%. Top gainers within the Retail industry included Haverty Furniture Companies ( HVT.A), up 2.5%, PC Connection ( PCCC), up 5.6%, Haverty Furniture Companies ( HVT), up 1.8%, Bon-Ton Stores ( BONT), up 4.4% and Pantry ( PTRY), up 1.6%.

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

Bon-Ton Stores ( BONT) is one of the companies that pushed the Retail industry higher today. Bon-Ton Stores was up $0.41 (4.4%) to $9.71 on average volume. Throughout the day, 439,107 shares of Bon-Ton Stores exchanged hands as compared to its average daily volume of 301,900 shares. The stock ranged in a price between $9.34-$10.20 after having opened the day at $9.34 as compared to the previous trading day's close of $9.30.

The Bon-Ton Stores, Inc., through its subsidiaries, operates department stores in the United States. Its stores offer brand-name fashion apparel and accessories for women, men, and children, as well as cosmetics, home furnishings, footwear, and other goods. Bon-Ton Stores has a market cap of $159.2 million and is part of the services sector. Shares are down 42.8% year-to-date as of the close of trading on Thursday. Currently there are no analysts who rate Bon-Ton Stores a buy, no analysts rate it a sell, and 1 rates it a hold.

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TheStreet Ratings rates Bon-Ton Stores as a sell. The company's weaknesses can be seen in multiple areas, such as its deteriorating net income, generally high debt management risk, disappointing return on equity, weak operating cash flow and generally disappointing historical performance in the stock itself.

Highlights from TheStreet Ratings analysis on BONT go as follows:

  • 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 Multiline Retail industry average. The net income has decreased by 18.3% when compared to the same quarter one year ago, dropping from -$26.64 million to -$31.51 million.
  • The debt-to-equity ratio is very high at 9.40 and currently higher than the industry average, implying increased risk associated with the management of debt levels within the company. Along with this, the company manages to maintain a quick ratio of 0.10, which clearly demonstrates the inability to cover short-term cash needs.
  • The company's current return on equity has slightly decreased from the same quarter one year prior. This implies a minor weakness in the organization. Compared to other companies in the Multiline Retail industry and the overall market, BON-TON STORES INC's return on equity significantly trails that of both the industry average and the S&P 500.
  • Net operating cash flow has significantly decreased to -$15.80 million or 258.87% when compared to the same quarter last year. In addition, when comparing to the industry average, the firm's growth rate is much lower.
  • Looking at the price performance of BONT's shares over the past 12 months, there is not much good news to report: the stock is down 52.10%, and it has underformed the S&P 500 Index. In addition, the company's earnings per share are lower today than the year-earlier 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.

You can view the full analysis from the report here: Bon-Ton 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.

At the close, Haverty Furniture Companies ( HVT) was up $0.39 (1.8%) to $22.62 on average volume. Throughout the day, 109,840 shares of Haverty Furniture Companies exchanged hands as compared to its average daily volume of 118,200 shares. The stock ranged in a price between $22.19-$23.06 after having opened the day at $22.22 as compared to the previous trading day's close of $22.23.

Haverty Furniture Companies, Inc. operates as a specialty retailer of residential furniture and accessories in the United States. It also offers mattress product lines under the Sealy, Serta, Stearns & Foster, and Tempur-Pedic names. Haverty Furniture Companies has a market cap of $488.2 million and is part of the services sector. Shares are down 29.0% year-to-date as of the close of trading on Thursday. Currently there are 3 analysts who rate Haverty Furniture Companies 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 Haverty Furniture Companies as a buy. The company's strengths can be seen in multiple areas, such as its largely solid financial position with reasonable debt levels by most measures, reasonable valuation levels, good cash flow from operations, expanding profit margins and notable return on equity. We feel these strengths outweigh the fact that the company has had lackluster performance in the stock itself.

Highlights from TheStreet Ratings analysis on HVT go as follows:

  • HVT's debt-to-equity ratio is very low at 0.06 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 1.31, which illustrates the ability to avoid short-term cash problems.
  • Net operating cash flow has significantly increased by 56.76% to $8.45 million when compared to the same quarter last year. In addition, HAVERTY FURNITURE has also vastly surpassed the industry average cash flow growth rate of -3.34%.
  • The gross profit margin for HAVERTY FURNITURE is rather high; currently it is at 56.83%. It has increased from the same quarter the previous year. Regardless of the strong results of the gross profit margin, the net profit margin of 3.37% trails the industry average.
  • HVT, with its decline in revenue, slightly underperformed the industry average of 0.6%. Since the same quarter one year prior, revenues slightly dropped by 2.3%. The declining revenue appears to have seeped down to the company's bottom line, decreasing earnings per share.

You can view the full analysis from the report here: Haverty Furniture Companies 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.

PC Connection ( PCCC) was another company that pushed the Retail industry higher today. PC Connection was up $1.14 (5.6%) to $21.57 on heavy volume. Throughout the day, 76,920 shares of PC Connection exchanged hands as compared to its average daily volume of 40,400 shares. The stock ranged in a price between $20.40-$21.95 after having opened the day at $21.95 as compared to the previous trading day's close of $20.43.

PC Connection, Inc. operates as a direct marketer of a range of information technology (IT) solutions. The company operates through three segments: SMB, Large Account, and Public Sector. PC Connection has a market cap of $521.5 million and is part of the services sector. Shares are down 17.8% year-to-date as of the close of trading on Thursday. Currently there are no analysts who rate PC Connection a buy, 1 analyst rates it a sell, and none rate it a hold.

TheStreet Ratings rates PC Connection 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, reasonable valuation levels, solid stock price performance and growth in earnings per share. We feel these strengths outweigh the fact that the company has had somewhat disappointing return on equity.

Highlights from TheStreet Ratings analysis on PCCC go as follows:

  • PCCC's revenue growth has slightly outpaced the industry average of 8.6%. Since the same quarter one year prior, revenues rose by 10.8%. This growth in revenue appears to have trickled down to the company's bottom line, improving the earnings per share.
  • PCCC 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. To add to this, PCCC has a quick ratio of 2.25, which demonstrates the ability of the company to cover short-term liquidity needs.
  • The stock has risen over the past year as investors have generally rewarded the company for its earnings growth and other positive factors like the ones we have cited in this report. Turning our attention to the future direction of the stock, it goes without saying that even the best stocks can fall in an overall down market. However, in any other environment, this stock still has good upside potential despite the fact that it has already risen in the past year.
  • PC CONNECTION INC has improved earnings per share by 17.4% 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. We feel that this trend should continue. During the past fiscal year, PC CONNECTION INC increased its bottom line by earning $1.35 versus $1.24 in the prior year. This year, the market expects an improvement in earnings ($1.50 versus $1.35).
  • The net income growth from the same quarter one year ago has exceeded that of the S&P 500 and the Electronic Equipment, Instruments & Components industry average. The net income increased by 16.9% when compared to the same quarter one year prior, going from $6.10 million to $7.13 million.

You can view the full analysis from the report here: PC Connection 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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