3 Specialty Retail Stocks Pushing 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 traded up today with the Dow Jones Industrial Average ( ^DJI) trading up 81 points (0.5%) at 16,920 as of Tuesday, Aug. 19, 2014, 4:20 PM ET. The NYSE advances/declines ratio sits at 1,954 issues advancing vs. 1,082 declining with 162 unchanged.

The Specialty Retail industry as a whole closed the day up 0.3% versus the S&P 500, which was up 0.5%. Top gainers within the Specialty Retail industry included Charles & Colvard ( CTHR), up 3.6%, Lentuo International ( LAS), up 6.6%, CSS Industries ( CSS), up 1.6%, Build-A-Bear Workshop ( BBW), up 4.5% and HHGregg ( HGG), up 1.8%.

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

CSS Industries ( CSS) is one of the companies that pushed the Specialty Retail industry higher today. CSS Industries was up $0.41 (1.6%) to $25.31 on light volume. Throughout the day, 9,498 shares of CSS Industries exchanged hands as compared to its average daily volume of 21,000 shares. The stock ranged in a price between $24.74-$25.42 after having opened the day at $24.97 as compared to the previous trading day's close of $24.90.

CSS Industries, Inc., a consumer products company, is engaged in the design, manufacture, procurement, distribution, and sale of various occasion and seasonal social expression products primarily to mass market retailers primarily in the United States and Canada. CSS Industries has a market cap of $226.3 million and is part of the financial sector. Shares are down 13.2% year-to-date as of the close of trading on Monday. Currently there are no analysts who rate CSS Industries a buy, no analysts rate it a sell, and none rate it a hold.

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TheStreet Ratings rates CSS Industries as a buy. The company's strengths can be seen in multiple areas, such as its compelling growth in net income, revenue growth, largely solid financial position with reasonable debt levels by most measures, reasonable valuation levels and impressive record of earnings per share growth. We feel these strengths outweigh the fact that the company shows low profit margins.

Highlights from TheStreet Ratings analysis on CSS go as follows:

  • The net income growth from the same quarter one year ago has significantly exceeded that of the S&P 500 and the Household Durables industry. The net income increased by 20.5% when compared to the same quarter one year prior, going from -$1.67 million to -$1.33 million.
  • Despite its growing revenue, the company underperformed as compared with the industry average of 9.3%. Since the same quarter one year prior, revenues slightly increased by 2.4%. This growth in revenue appears to have trickled down to the company's bottom line, improving the earnings per share.
  • CSS 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 3.70, which clearly demonstrates the ability to cover short-term cash needs.
  • CSS INDUSTRIES INC has improved earnings per share by 22.2% 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, CSS INDUSTRIES INC increased its bottom line by earning $1.97 versus $1.62 in the prior year.

You can view the full analysis from the report here: CSS Industries Ratings Report

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At the close, Lentuo International ( LAS) was up $0.17 (6.6%) to $2.75 on heavy volume. Throughout the day, 236,778 shares of Lentuo International exchanged hands as compared to its average daily volume of 96,700 shares. The stock ranged in a price between $2.53-$2.79 after having opened the day at $2.60 as compared to the previous trading day's close of $2.58.

Lentuo International Inc. operates automobile franchise dealerships in the People's Republic of China. Lentuo International has a market cap of $78.8 million and is part of the financial sector. Shares are down 6.2% year-to-date as of the close of trading on Monday. Currently there are no analysts who rate Lentuo International a buy, no analysts rate it a sell, and none rate it a hold.

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TheStreet Ratings rates Lentuo International as a hold. The company's strengths can be seen in multiple areas, such as its revenue growth, compelling growth in net income and reasonable valuation levels. However, as a counter to these strengths, we also find weaknesses including generally higher debt management risk, a generally disappointing performance in the stock itself and poor profit margins.

Highlights from TheStreet Ratings analysis on LAS go as follows:

  • The revenue growth came in higher than the industry average of 0.3%. Since the same quarter one year prior, revenues rose by 11.6%. This growth in revenue appears to have trickled down to the company's bottom line, improving the earnings per share.
  • The net income growth from the same quarter one year ago has significantly exceeded that of the S&P 500 and the Specialty Retail industry. The net income increased by 212.3% when compared to the same quarter one year prior, rising from -$1.30 million to $1.46 million.
  • LENTUO INTERNATIONAL -ADR 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, LENTUO INTERNATIONAL -ADR turned its bottom line around by earning $0.12 versus -$0.03 in the prior year.
  • LAS's stock share price has done very poorly compared to where it was a year ago: Despite any rallies, the net result is that it is down by 56.04%, which is also worse that the performance of the S&P 500 Index. Investors have so far failed to pay much attention to the earnings improvements the company has managed to achieve over the last 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.
  • The debt-to-equity ratio of 1.38 is relatively high when compared with the industry average, suggesting a need for better debt level management. Along with this, the company manages to maintain a quick ratio of 0.29, which clearly demonstrates the inability to cover short-term cash needs.

You can view the full analysis from the report here: Lentuo International 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.

Charles & Colvard ( CTHR) was another company that pushed the Specialty Retail industry higher today. Charles & Colvard was up $0.08 (3.6%) to $2.28 on heavy volume. Throughout the day, 147,470 shares of Charles & Colvard exchanged hands as compared to its average daily volume of 56,800 shares. The stock ranged in a price between $2.25-$2.35 after having opened the day at $2.29 as compared to the previous trading day's close of $2.20.

Charles & Colvard, Ltd. manufactures, markets, and distributes moissanite jewels and finished jewelry featuring moissanite worldwide. Charles & Colvard has a market cap of $46.6 million and is part of the financial sector. Shares are down 56.4% year-to-date as of the close of trading on Monday. Currently there is 1 analyst who rates Charles & Colvard a buy, no analysts rate it a sell, and none rate it a hold.

TheStreet Ratings rates Charles & Colvard 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 and generally disappointing historical performance in the stock itself.

Highlights from TheStreet Ratings analysis on CTHR go as follows:

  • CHARLES & COLVARD LTD 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, CHARLES & COLVARD LTD swung to a loss, reporting -$0.05 versus $0.22 in the prior year. For the next year, the market is expecting a contraction of 720.0% in earnings (-$0.41 versus -$0.05).
  • 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 Textiles, Apparel & Luxury Goods industry. The net income has significantly decreased by 1161.5% when compared to the same quarter one year ago, falling from -$0.49 million to -$6.19 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 Textiles, Apparel & Luxury Goods industry and the overall market, CHARLES & COLVARD LTD's return on equity significantly trails that of both the industry average and the S&P 500.
  • Despite any intermediate fluctuations, we have only bad news to report on this stock's performance over the last year: it has tumbled by 71.69%, worse than the S&P 500's performance. Consistent with the plunge in the stock price, the company's earnings per share are down 1450.00% 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.
  • 36.06% is the gross profit margin for CHARLES & COLVARD LTD which we consider to be strong. Despite the high profit margin, it has decreased significantly from the same period last year. Despite the mixed results of the gross profit margin, CTHR's net profit margin of -78.98% significantly underperformed when compared to the industry average.

You can view the full analysis from the report here: Charles & Colvard 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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