3 Stocks Pushing The Retail Industry Lower

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The Retail industry as a whole closed the day down 0.9% versus the S&P 500, which was down 0.6%. Laggards within the Retail industry included ALCO Stores ( ALCS), down 3.3%, China Jo-Jo Drugstores ( CJJD), down 5.3%, China Nepstar Chain Drugstore ( NPD), down 1.9%, Appliance Recycling Centers Of America ( ARCI), down 25.9% and Village Super Market ( VLGEA), down 1.7%.

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

Appliance Recycling Centers Of America ( ARCI) is one of the companies that pushed the Retail industry lower today. Appliance Recycling Centers Of America was down $1.06 (25.9%) to $3.04 on heavy volume. Throughout the day, 267,275 shares of Appliance Recycling Centers Of America exchanged hands as compared to its average daily volume of 31,400 shares. The stock ranged in price between $2.98-$3.51 after having opened the day at $3.50 as compared to the previous trading day's close of $4.10.

Appliance Recycling Centers of America, Inc., together with its subsidiaries, sells new household appliances through a chain of company-owned retail stores under the ApplianceSmart name. The company operates in two segments, Recycling and Retail. Appliance Recycling Centers Of America has a market cap of $22.2 million and is part of the services sector. Shares are up 42.9% year-to-date as of the close of trading on Wednesday.

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TheStreet Ratings rates Appliance Recycling Centers Of America as a hold. The company's strengths can be seen in multiple areas, such as its revenue growth, solid stock price performance and notable return on equity. However, as a counter to these strengths, we also find weaknesses including weak operating cash flow and poor profit margins.

Highlights from TheStreet Ratings analysis on ARCI go as follows:

  • The revenue growth came in higher than the industry average of 0.5%. Since the same quarter one year prior, revenues rose by 10.1%. Growth in the company's revenue appears to have helped boost the earnings per share.
  • Powered by its strong earnings growth of 466.66% and other important driving factors, this stock has surged by 49.62% over the past year, outperforming the rise in the S&P 500 Index during the same period. Regarding the stock's future course, our hold rating indicates that we do not recommend additional investment in this stock despite its gains in the past year.
  • APPLIANCE RECYCLING CTR AMER 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. During the past fiscal year, APPLIANCE RECYCLING CTR AMER turned its bottom line around by earning $0.57 versus -$0.69 in the prior year.
  • The gross profit margin for APPLIANCE RECYCLING CTR AMER is currently lower than what is desirable, coming in at 29.20%. Regardless of ARCI's low profit margin, it has managed to increase from the same period last year. Despite the mixed results of the gross profit margin, the net profit margin of 2.89% trails the industry average.
  • Net operating cash flow has decreased to $2.63 million or 39.00% 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.

You can view the full analysis from the report here: Appliance Recycling Centers Of America Ratings Report

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At the close, China Nepstar Chain Drugstore ( NPD) was down $0.04 (1.9%) to $2.30 on light volume. Throughout the day, 24,779 shares of China Nepstar Chain Drugstore exchanged hands as compared to its average daily volume of 44,800 shares. The stock ranged in price between $2.28-$2.42 after having opened the day at $2.37 as compared to the previous trading day's close of $2.35.

China Nepstar Chain Drugstore Ltd., through its subsidiaries, owns and operates a retail drugstore chain in China. China Nepstar Chain Drugstore has a market cap of $221.1 million and is part of the services sector. Shares are up 27.7% year-to-date as of the close of trading on Wednesday. Currently there are no analysts who rate China Nepstar Chain Drugstore a buy, 1 analyst rates it a sell, and none rate it a hold.

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TheStreet Ratings rates China Nepstar Chain Drugstore as a hold. The company's strengths can be seen in multiple areas, such as its revenue growth, solid stock price performance and largely solid financial position with reasonable debt levels by most measures. However, as a counter to these strengths, we also find weaknesses including feeble growth in the company's earnings per share, deteriorating net income and disappointing return on equity.

Highlights from TheStreet Ratings analysis on NPD go as follows:

  • The revenue growth came in higher than the industry average of 4.3%. Since the same quarter one year prior, revenues slightly increased by 8.0%. 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.
  • Compared to its closing price of one year ago, NPD's share price has jumped by 51.33%, exceeding the performance of the broader market during that same time frame. Regarding the stock's future course, our hold rating indicates that we do not recommend additional investment in this stock despite its gains in the past year.
  • NPD 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. Although the company had a strong debt-to-equity ratio, its quick ratio of 0.79 is somewhat weak and could be cause for future problems.
  • CHINA NEPSTAR CHAIN DRUG-ADS 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. Earnings per share have declined over the last two years. We anticipate that this should continue in the coming year. During the past fiscal year, CHINA NEPSTAR CHAIN DRUG-ADS reported lower earnings of $0.02 versus $0.14 in the prior year. For the next year, the market is expecting a contraction of 50.0% in earnings ($0.01 versus $0.02).
  • 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 355.5% when compared to the same quarter one year ago, falling from $1.15 million to -$2.93 million.

You can view the full analysis from the report here: China Nepstar Chain Drugstore Ratings Report

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China Jo-Jo Drugstores ( CJJD) was another company that pushed the Retail industry lower today. China Jo-Jo Drugstores was down $0.08 (5.3%) to $1.44 on light volume. Throughout the day, 4,982 shares of China Jo-Jo Drugstores exchanged hands as compared to its average daily volume of 38,100 shares. The stock ranged in price between $1.44-$1.52 after having opened the day at $1.52 as compared to the previous trading day's close of $1.52.

China Jo-Jo Drugstores, Inc. operates as a retailer and distributor of pharmaceutical and other healthcare products in the People's Republic of China. China Jo-Jo Drugstores has a market cap of $21.9 million and is part of the services sector. Shares are up 58.4% year-to-date as of the close of trading on Wednesday.

TheStreet Ratings rates China Jo-Jo Drugstores 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, disappointing return on equity, poor profit margins and weak operating cash flow.

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Highlights from TheStreet Ratings analysis on CJJD go as follows:

  • CHINA JO-JO DRUGSTORES INC's earnings per share declined by 48.6% in the most recent quarter compared to the same quarter a year ago. The company has reported a trend of declining earnings per share over the past two years. During the past fiscal year, CHINA JO-JO DRUGSTORES INC reported poor results of -$1.81 versus -$1.05 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 Food & Staples Retailing industry. The net income has significantly decreased by 55.1% when compared to the same quarter one year ago, falling from -$9.85 million to -$15.29 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 Food & Staples Retailing industry and the overall market, CHINA JO-JO DRUGSTORES INC's return on equity significantly trails that of both the industry average and the S&P 500.
  • The gross profit margin for CHINA JO-JO DRUGSTORES INC is currently extremely low, coming in at 3.64%. It has decreased significantly from the same period last year. Along with this, the net profit margin of -94.77% is significantly below that of the industry average.
  • Net operating cash flow has declined marginally to $1.37 million or 6.22% 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.

You can view the full analysis from the report here: China Jo-Jo Drugstores Ratings Report

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