3 Services Stocks Pushing The Sector 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 traded up today with the Dow Jones Industrial Average ( ^DJI) trading up 18 points (0.1%) at 16,572 as of Monday, Aug. 11, 2014, 3:55 PM ET. The NYSE advances/declines ratio sits at 2,374 issues advancing vs. 630 declining with 131 unchanged.

The Services sector as a whole closed the day up 1.0% versus the S&P 500, which was up 0.3%. Top gainers within the Services sector included Haverty Furniture Companies ( HVT.A), up 1.6%, Radio One ( ROIA), up 5.2%, QKL Stores ( QKLS), up 4.9%, Alon Blue Square Israel ( BSI), up 2.7% and ChinaNet Online Holdings ( CNET), up 3.1%.

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

ChinaNet Online Holdings ( CNET) is one of the companies that pushed the Services sector higher today. ChinaNet Online Holdings was up $0.02 (3.1%) to $0.66 on light volume. Throughout the day, 18,110 shares of ChinaNet Online Holdings exchanged hands as compared to its average daily volume of 30,100 shares. The stock ranged in a price between $0.64-$0.67 after having opened the day at $0.67 as compared to the previous trading day's close of $0.64.

ChinaNet Online Holdings, Inc., through its subsidiaries, provides business-to-businesses Internet services for small and medium enterprises (SMEs) sales networks in the People's Republic of China. ChinaNet Online Holdings has a market cap of $15.2 million and is part of the specialty retail industry. Shares are down 19.1% year-to-date as of the close of trading on Friday. Currently there are no analysts who rate ChinaNet Online Holdings 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 ChinaNet Online Holdings 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.

Highlights from TheStreet Ratings analysis on CNET go as follows:

  • CHINANET ONLINE HOLDINGS's earnings have gone downhill when comparing its most recently reported quarter with the same quarter a year earlier. The company has reported a trend of declining earnings per share over the past two years. During the past fiscal year, CHINANET ONLINE HOLDINGS swung to a loss, reporting -$0.01 versus $0.13 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 Media industry. The net income has significantly decreased by 2326.7% when compared to the same quarter one year ago, falling from $0.03 million to -$0.67 million.
  • Current return on equity is lower than its ROE from the same quarter one year prior. This is a clear sign of weakness within the company. Compared to other companies in the Media industry and the overall market, CHINANET ONLINE HOLDINGS's return on equity significantly trails that of both the industry average and the S&P 500.
  • The gross profit margin for CHINANET ONLINE HOLDINGS is currently lower than what is desirable, coming in at 26.26%. It has decreased significantly from the same period last year. Along with this, the net profit margin of -12.88% is significantly below that of the industry average.
  • Net operating cash flow has significantly decreased to -$1.35 million or 213.45% when compared to the same quarter last year. In addition, when comparing to the industry average, the firm's growth rate is much lower.

You can view the full analysis from the report here: ChinaNet Online 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.

At the close, QKL Stores ( QKLS) was up $0.16 (4.9%) to $3.47 on average volume. Throughout the day, 2,200 shares of QKL Stores exchanged hands as compared to its average daily volume of 2,800 shares. The stock ranged in a price between $3.11-$3.47 after having opened the day at $3.31 as compared to the previous trading day's close of $3.31.

QKL Stores Inc., through its subsidiaries, engages in the operation of retail chain stores in the People's Republic of China. The company's supermarkets and hypermarkets sell a selection of merchandise, including groceries, fresh food, and non-food items. QKL Stores has a market cap of $4.6 million and is part of the specialty retail industry. Shares are down 21.2% year-to-date as of the close of trading on Friday. Currently there are no analysts who rate QKL Stores 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 QKL Stores 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 high debt management risk and generally disappointing historical performance in the stock itself.

Highlights from TheStreet Ratings analysis on QKLS 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 Food & Staples Retailing industry. The net income has significantly decreased by 858.3% when compared to the same quarter one year ago, falling from $0.40 million to -$3.06 million.
  • The gross profit margin for QKL STORES INC is rather low; currently it is at 17.12%. It has decreased from the same quarter the previous year. Along with this, the net profit margin of -3.55% trails that of the industry average.
  • Net operating cash flow has decreased to $18.00 million or 25.83% 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.
  • QKLS's debt-to-equity ratio of 0.88 is somewhat low overall, but it is high when compared to the industry average, implying that the management of the debt levels should be evaluated further. Even though the debt-to-equity ratio shows mixed results, the company's quick ratio of 0.47 is very low and demonstrates very weak liquidity.
  • Despite any intermediate fluctuations, we have only bad news to report on this stock's performance over the last year: it has tumbled by 59.58%, worse than the S&P 500's performance. Consistent with the plunge in the stock price, the company's earnings per share are down 844.44% compared to 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: QKL 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.

Radio One ( ROIA) was another company that pushed the Services sector higher today. Radio One was up $0.16 (5.2%) to $3.23 on heavy volume. Throughout the day, 10,667 shares of Radio One exchanged hands as compared to its average daily volume of 2,600 shares. The stock ranged in a price between $3.16-$3.37 after having opened the day at $3.26 as compared to the previous trading day's close of $3.07.

Radio One, Inc., together with its subsidiaries, operates as an urban-oriented multi-media company in the United States. The company operates through four segments: Radio Broadcasting, Reach Media, Internet, and Cable Television. Radio One has a market cap of $6.8 million and is part of the specialty retail industry. Shares are down 23.2% year-to-date as of the close of trading on Friday. Currently there are no analysts who rate Radio One a buy, no analysts rate it a sell, and none rate it a hold.

TheStreet Ratings rates Radio One as a sell. Among the areas we feel are negative, one of the most important has been very high debt management risk by most measures.

Highlights from TheStreet Ratings analysis on ROIA go as follows:

  • Although ROIA's debt-to-equity ratio of 3.28 is very high, it is currently less than that of the industry average.
  • The company's current return on equity greatly increased when compared to its ROE from the same quarter one year prior. This is a signal of significant strength within the corporation. Compared to other companies in the Media industry and the overall market, RADIO ONE INC's return on equity significantly trails that of both the industry average and the S&P 500.
  • The gross profit margin for RADIO ONE INC is rather high; currently it is at 68.71%. Regardless of ROIA's high profit margin, it has managed to decrease from the same period last year. Despite the mixed results of the gross profit margin, ROIA's net profit margin of -9.97% significantly underperformed when compared to the industry average.
  • ROIA, with its decline in revenue, underperformed when compared the industry average of 11.7%. Since the same quarter one year prior, revenues slightly dropped by 9.3%. The declining revenue has not hurt the company's bottom line, with increasing earnings per share.
  • RADIO ONE INC has improved earnings per share by 20.7% 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, RADIO ONE INC continued to lose money by earning -$1.30 versus -$1.33 in the prior year.

You can view the full analysis from the report here: Radio One 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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