3 Stocks Pushing The Media 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 Media industry as a whole closed the day down 0.3% versus the S&P 500, which was down 0.1%. Laggards within the Media industry included RLJ Entertainment ( RLJE), down 2.5%, ChinaNet Online Holdings ( CNET), down 5.9%, Insignia Systems ( ISIG), down 3.5%, Crown Media Holdings ( CRWN), down 2.0% and Daily Journal ( DJCO), down 3.5%.

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

Crown Media Holdings ( CRWN) is one of the companies that pushed the Media industry lower today. Crown Media Holdings was down $0.07 (2.0%) to $3.35 on light volume. Throughout the day, 36,045 shares of Crown Media Holdings exchanged hands as compared to its average daily volume of 67,800 shares. The stock ranged in price between $3.33-$3.43 after having opened the day at $3.43 as compared to the previous trading day's close of $3.42.

Crown Media Holdings, Inc., through its wholly-owned subsidiary, Crown Media United States, LLC, owns, operates, and distributes pay television networks for adults and families in the United States. The company operates Hallmark Channel and Hallmark Movie Channel. Crown Media Holdings has a market cap of $1.2 billion and is part of the services sector. Shares are down 3.1% year-to-date as of the close of trading on Tuesday.

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TheStreet Ratings rates Crown Media Holdings as a buy. The company's strengths can be seen in multiple areas, such as its revenue growth, good cash flow from operations, increase in stock price during the past year, expanding profit margins and largely solid financial position with reasonable debt levels by most measures. We feel these strengths outweigh the fact that the company has had somewhat weak growth in earnings per share.

Highlights from TheStreet Ratings analysis on CRWN go as follows:

  • Despite its growing revenue, the company underperformed as compared with the industry average of 12.4%. Since the same quarter one year prior, revenues slightly increased by 8.8%. 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.
  • Net operating cash flow has increased to $32.38 million or 17.67% when compared to the same quarter last year. In addition, CROWN MEDIA HOLDINGS INC has also modestly surpassed the industry average cash flow growth rate of 14.05%.
  • Compared to where it was 12 months ago, the stock is up, but it has so far lagged the appreciation in the S&P 500. 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 CROWN MEDIA HOLDINGS INC is rather high; currently it is at 57.48%. Regardless of CRWN's high profit margin, it has managed to decrease from the same period last year. Despite the mixed results of the gross profit margin, CRWN's net profit margin of 16.39% compares favorably to the industry average.
  • Even though the current debt-to-equity ratio is 1.01, it is still below the industry average, suggesting that this level of debt is acceptable within the Media industry. Regardless of the somewhat mixed results with the debt-to-equity ratio, the company's quick ratio of 1.36 is sturdy.

You can view the full analysis from the report here: Crown Media Holdings Ratings Report

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At the close, ChinaNet Online Holdings ( CNET) was down $0.06 (5.9%) to $0.95 on average volume. Throughout the day, 173,575 shares of ChinaNet Online Holdings exchanged hands as compared to its average daily volume of 128,900 shares. The stock ranged in price between $0.93-$1.06 after having opened the day at $1.05 as compared to the previous trading day's close of $1.01.

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 $18.8 million and is part of the services sector. Shares are up 20.2% year-to-date as of the close of trading on Tuesday.

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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

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RLJ Entertainment ( RLJE) was another company that pushed the Media industry lower today. RLJ Entertainment was down $0.08 (2.5%) to $2.90 on heavy volume. Throughout the day, 23,269 shares of RLJ Entertainment exchanged hands as compared to its average daily volume of 5,700 shares. The stock ranged in price between $2.90-$3.14 after having opened the day at $2.97 as compared to the previous trading day's close of $2.98.

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 $43.0 million and is part of the services sector. Shares are down 37.9% year-to-date as of the close of trading on Tuesday.

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 42.91%, 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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3 Stocks Pushing The Media Industry Lower

3 Stocks Pushing The Media Industry Lower

3 Stocks Driving The Media Industry Higher

3 Stocks Driving The Media Industry Higher