3 Stocks Pushing The Services Sector 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 Services sector as a whole was unchanged today versus the S&P 500, which was unchanged. Laggards within the Services sector included General Employment ( JOB), down 5.3%, Tiger Media ( IDI), down 3.8%, DLH Holdings ( DLHC), down 2.5%, Bioanalytical Systems ( BASI), down 6.1% and Acorn International ( ATV), down 3.2%.

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

Acorn International ( ATV) is one of the companies that pushed the Services sector lower today. Acorn International was down $0.06 (3.2%) to $1.80 on light volume. Throughout the day, 13,321 shares of Acorn International exchanged hands as compared to its average daily volume of 20,000 shares. The stock ranged in price between $1.80-$1.88 after having opened the day at $1.86 as compared to the previous trading day's close of $1.86.

Acorn International, Inc., an integrated multi-platform marketing company, develops, promotes, and sells a portfolio of proprietary-branded products; and third parties products. The company operates two sales platforms, including integrated direct sales and a nationwide distribution network. Acorn International has a market cap of $52.1 million and is part of the leisure industry. Shares are up 19.9% year-to-date as of the close of trading on Tuesday.

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TheStreet Ratings rates Acorn International 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 ATV go as follows:

  • ACORN INTERNATIONAL INC -ADR's earnings per share declined by 30.4% 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, ACORN INTERNATIONAL INC -ADR reported poor results of -$1.45 versus -$0.59 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 Internet & Catalog Retail industry. The net income has decreased by 21.5% when compared to the same quarter one year ago, dropping from -$6.87 million to -$8.34 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 Internet & Catalog Retail industry and the overall market, ACORN INTERNATIONAL INC -ADR's return on equity significantly trails that of both the industry average and the S&P 500.
  • The share price of ACORN INTERNATIONAL INC -ADR has not done very well: it is down 13.58% 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.
  • 43.21% is the gross profit margin for ACORN INTERNATIONAL INC -ADR which we consider to be strong. Regardless of ATV's high profit margin, it has managed to decrease from the same period last year. Despite the mixed results of the gross profit margin, ATV's net profit margin of -29.44% significantly underperformed when compared to the industry average.

You can view the full analysis from the report here: Acorn International Ratings Report

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At the close, Bioanalytical Systems ( BASI) was down $0.15 (6.1%) to $2.30 on light volume. Throughout the day, 7,260 shares of Bioanalytical Systems exchanged hands as compared to its average daily volume of 11,100 shares. The stock ranged in price between $2.30-$2.40 after having opened the day at $2.37 as compared to the previous trading day's close of $2.45.

Bioanalytical Systems, Inc. provides drug discovery and development services, and analytical instruments for pharmaceutical, biotechnology, academic, and government organizations in North America, the Pacific Rim, Europe, and internationally. Bioanalytical Systems has a market cap of $19.9 million and is part of the leisure industry. Shares are down 9.6% year-to-date as of the close of trading on Tuesday.

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TheStreet Ratings rates Bioanalytical Systems as a sell. The area that we feel has been the company's primary weakness has been its disappointing return on equity.

Highlights from TheStreet Ratings analysis on BASI go as follows:

  • 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 Life Sciences Tools & Services industry and the overall market, BIOANALYTICAL SYSTEMS INC's return on equity significantly trails that of both the industry average and the S&P 500.
  • The current debt-to-equity ratio, 0.58, is low and is below the industry average, implying that there has been successful management of debt levels. Even though the company has a strong debt-to-equity ratio, the quick ratio of 0.30 is very weak and demonstrates a lack of ability to pay short-term obligations.
  • 40.75% is the gross profit margin for BIOANALYTICAL SYSTEMS INC which we consider to be strong. It has increased from the same quarter the previous year. Regardless of the strong results of the gross profit margin, the net profit margin of -3.70% is in-line with the industry average.
  • Net operating cash flow has significantly increased by 85.51% to -$0.03 million when compared to the same quarter last year. The firm also exceeded the industry average cash flow growth rate of 67.34%.
  • Investors have driven up the company's shares by 66.08% over the past year, a rise that has exceeded that of the S&P 500 Index. Regarding the future course of this stock, we feel that the risks involved in investing in BASI do not compensate for any future upside potential, despite the fact that it has seen nice gains over the past 12 months.

You can view the full analysis from the report here: Bioanalytical Systems Ratings Report

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Tiger Media ( IDI) was another company that pushed the Services sector lower today. Tiger Media was down $0.02 (3.8%) to $0.53 on average volume. Throughout the day, 48,265 shares of Tiger Media exchanged hands as compared to its average daily volume of 39,300 shares. The stock ranged in price between $0.52-$0.56 after having opened the day at $0.55 as compared to the previous trading day's close of $0.55.

Tiger Media has a market cap of $22.1 million and is part of the leisure industry. Shares are down 63.6% year-to-date as of the close of trading on Tuesday.

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