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 0.6% versus the S&P 500, which was down 0.2%. Laggards within the Diversified Services industry included General Employment ( JOB), down 3.1%, RLJ Entertainment ( RLJE), down 4.1%, Universal Security Instruments ( UUU), down 1.9%, Onvia ( ONVI), down 3.0% and DLH Holdings ( DLHC), down 4.6%.

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

51job ( JOBS) is one of the companies that pushed the Diversified Services industry lower today. 51job was down $3.42 (8.9%) to $34.83 on heavy volume. Throughout the day, 576,111 shares of 51job exchanged hands as compared to its average daily volume of 153,700 shares. The stock ranged in price between $31.66-$36.98 after having opened the day at $31.66 as compared to the previous trading day's close of $38.25.

51job, Inc., through its subsidiaries, provides integrated human resource services in the People's Republic of China. 51job has a market cap of $2.2 billion and is part of the services sector. Shares are down 1.8% year-to-date as of the close of trading on Monday. Currently there are no analysts who rate 51job a buy, 1 analyst rates it a sell, and 2 rate it a hold.

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TheStreet Ratings rates 51job as a buy. The company's strengths can be seen in multiple areas, such as its increase in net income, revenue growth, largely solid financial position with reasonable debt levels by most measures, increase in stock price during the past year and expanding profit margins. Although no company is perfect, currently we do not see any significant weaknesses which are likely to detract from the generally positive outlook.

Highlights from TheStreet Ratings analysis on JOBS go as follows:

  • The net income growth from the same quarter one year ago has exceeded that of the S&P 500 and greatly outperformed compared to the Professional Services industry average. The net income increased by 8.8% when compared to the same quarter one year prior, going from $17.52 million to $19.06 million.
  • Despite its growing revenue, the company underperformed as compared with the industry average of 20.3%. Since the same quarter one year prior, revenues rose by 14.9%. This growth in revenue appears to have trickled down to the company's bottom line, improving the earnings per share.
  • JOBS 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. Along with this, the company maintains a quick ratio of 4.12, which clearly demonstrates the ability to cover short-term cash 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.
  • The gross profit margin for 51JOB INC -ADR is currently very high, coming in at 74.54%. It has increased from the same quarter the previous year. Along with this, the net profit margin of 28.24% significantly outperformed against the industry average.

You can view the full analysis from the report here: 51job Ratings Report

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At the close, Universal Security Instruments ( UUU) was down $0.08 (1.9%) to $4.01 on light volume. Throughout the day, 1,048 shares of Universal Security Instruments exchanged hands as compared to its average daily volume of 4,800 shares. The stock ranged in price between $4.01-$4.01 after having opened the day at $4.01 as compared to the previous trading day's close of $4.09.

Universal Security Instruments, Inc. designs, markets, and distributes safety and security products in the United States and Canada. Universal Security Instruments has a market cap of $9.5 million and is part of the services sector. Shares are down 5.5% year-to-date as of the close of trading on Monday.

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TheStreet Ratings rates Universal Security Instruments as a sell. The company's weaknesses can be seen in multiple areas, such as its deteriorating net income, disappointing return on equity, weak operating cash flow, poor profit margins and generally disappointing historical performance in the stock itself.

Highlights from TheStreet Ratings analysis on UUU 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 Electrical Equipment industry. The net income has significantly decreased by 1695.7% when compared to the same quarter one year ago, falling from $0.02 million to -$0.37 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 Electrical Equipment industry and the overall market, UNIVERSAL SECURITY INSTRUMNT's return on equity significantly trails that of both the industry average and the S&P 500.
  • Net operating cash flow has decreased to $0.68 million or 45.83% 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.
  • The gross profit margin for UNIVERSAL SECURITY INSTRUMNT is currently lower than what is desirable, coming in at 30.38%. Regardless of UUU's low profit margin, it has managed to increase from the same period last year. Despite the mixed results of the gross profit margin, UUU's net profit margin of -9.81% significantly underperformed when compared to the industry average.
  • Despite any intermediate fluctuations, we have only bad news to report on this stock's performance over the last year: it has tumbled by 26.28%, worse than the S&P 500's performance. Consistent with the plunge in the stock price, the company's earnings per share are down 1700.00% 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: Universal Security Instruments 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.

RLJ Entertainment ( RLJE) was another company that pushed the Diversified Services industry lower today. RLJ Entertainment was down $0.14 (4.1%) to $3.38 on heavy volume. Throughout the day, 40,242 shares of RLJ Entertainment exchanged hands as compared to its average daily volume of 4,600 shares. The stock ranged in price between $3.33-$3.53 after having opened the day at $3.45 as compared to the previous trading day's close of $3.53.

RLJ Entertainment, Inc., an entertainment company, acquires content rights in British episodic mystery and drama, urban programming, and full-length motion pictures. It operates through three segments: Intellectual Property Licensing, Wholesale, and Direct-to-Consumer. RLJ Entertainment has a market cap of $46.9 million and is part of the services sector. Shares are down 26.3% year-to-date as of the close of trading on Monday.

TheStreet Ratings rates RLJ Entertainment 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 generally disappointing historical performance in the stock itself.

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Highlights from TheStreet Ratings analysis on RLJE go as follows:

  • RLJ ENTERTAINMENT 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. The company has reported a trend of declining earnings per share over the past two years. During the past fiscal year, RLJ ENTERTAINMENT INC reported poor results of -$2.30 versus -$0.49 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 183.1% when compared to the same quarter one year ago, falling from -$3.56 million to -$10.07 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 Media industry and the overall market, RLJ ENTERTAINMENT INC's return on equity significantly trails that of both the industry average and the S&P 500.
  • The gross profit margin for RLJ ENTERTAINMENT INC is rather low; currently it is at 20.04%. It has decreased significantly from the same period last year. Along with this, the net profit margin of -33.26% is significantly below that of the industry average.
  • Despite any intermediate fluctuations, we have only bad news to report on this stock's performance over the last year: it has tumbled by 38.69%, worse than the S&P 500's performance. Consistent with the plunge in the stock price, the company's earnings per share are down 200.00% 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: RLJ Entertainment 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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