3 Stocks Pushing The Diversified Services Industry Lower

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.

The Diversified Services industry as a whole closed the day down 0.8% versus the S&P 500, which was down 0.1%. Laggards within the Diversified Services industry included Spar Group ( SGRP), down 3.6%, NV5 Holdings ( NVEE), down 6.1%, DLH Holdings ( DLHC), down 4.9%, PDI ( PDII), down 2.5% and China HGS Real Estate ( HGSH), down 3.7%.

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 $0.09 (2.5%) to $3.50 on light volume. Throughout the day, 2,461 shares of PDI exchanged hands as compared to its average daily volume of 9,400 shares. The stock ranged in price between $3.42-$3.59 after having opened the day at $3.42 as compared to the previous trading day's close of $3.59.

PDI, Inc. provides outsourced commercial services to pharmaceutical, biotechnology, and healthcare companies in the United States. PDI has a market cap of $58.7 million and is part of the services sector. Shares are down 25.4% year-to-date as of the close of trading on Thursday. 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, NV5 Holdings ( NVEE) was down $0.60 (6.1%) to $9.30 on average volume. Throughout the day, 1,900 shares of NV5 Holdings exchanged hands as compared to its average daily volume of 2,200 shares. The stock ranged in price between $9.10-$9.50 after having opened the day at $9.50 as compared to the previous trading day's close of $9.90.

NV5 Holdings has a market cap of $56.4 million and is part of the services sector. Shares are up 21.6% year-to-date as of the close of trading on Thursday. Currently there is 1 analyst who rates NV5 Holdings a buy, no analysts rate it a sell, and none rate it a hold.

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Highlights from TheStreet Ratings analysis on NVEE go as follows:

You can view the full analysis from the report here: NV5 Holdings 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.

Spar Group ( SGRP) was another company that pushed the Diversified Services industry lower today. Spar Group was down $0.05 (3.6%) to $1.30 on heavy volume. Throughout the day, 24,250 shares of Spar Group exchanged hands as compared to its average daily volume of 10,500 shares. The stock ranged in price between $1.29-$1.35 after having opened the day at $1.35 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 $27.9 million and is part of the services sector. Shares are down 31.8% year-to-date as of the close of trading on Thursday.

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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