3 Stocks Driving The Diversified Services 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 68 points (0.4%) at 17,137 as of Friday, Sept. 5, 2014, 4:20 PM ET. The NYSE advances/declines ratio sits at 1,903 issues advancing vs. 1,131 declining with 161 unchanged.

The Diversified Services industry as a whole closed the day up 0.3% versus the S&P 500, which was up 0.5%. Top gainers within the Diversified Services industry included DLH Holdings ( DLHC), up 5.1%, Bioanalytical Systems ( BASI), up 1.9%, Birner Dental Management Services ( BDMS), up 1.6%, VirtualScopics ( VSCP), up 2.9% and Cambium Learning Group ( ABCD), up 3.9%.

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

Cambium Learning Group ( ABCD) is one of the companies that pushed the Diversified Services industry higher today. Cambium Learning Group was up $0.06 (3.9%) to $1.62 on light volume. Throughout the day, 5,345 shares of Cambium Learning Group exchanged hands as compared to its average daily volume of 25,100 shares. The stock ranged in a price between $1.56-$1.64 after having opened the day at $1.56 as compared to the previous trading day's close of $1.56.

Cambium Learning Group, Inc. operates as an educational solutions and services company in the United States. It operates in four segments: Voyager Sopris Learning (VSL), Learning A-Z, ExploreLearning, and Kurzweil/IntelliTools. Cambium Learning Group has a market cap of $74.1 million and is part of the services sector. Shares are down 0.6% year-to-date as of the close of trading on Thursday. Currently there are no analysts who rate Cambium Learning Group 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 Cambium Learning Group as a sell. The company's weaknesses can be seen in multiple areas, such as its generally disappointing historical performance in the stock itself and weak operating cash flow.

Highlights from TheStreet Ratings analysis on ABCD go as follows:

  • In its most recent trading session, ABCD has closed at a price level that was not very different from its closing price of one year earlier. This is probably due to its weak earnings growth as well as other mixed factors. 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.
  • Net operating cash flow has declined marginally to -$16.65 million or 2.51% when compared to the same quarter last year. Despite a decrease in cash flow CAMBIUM LEARNING GROUP INC is still fairing well by exceeding its industry average cash flow growth rate of -15.56%.
  • The company, on the basis of net income growth from the same quarter one year ago, has significantly underperformed compared to the Diversified Consumer Services industry average, but is greater than that of the S&P 500. The net income increased by 27.4% when compared to the same quarter one year prior, rising from -$9.08 million to -$6.59 million.
  • ABCD, with its decline in revenue, slightly underperformed the industry average of 2.2%. Since the same quarter one year prior, revenues slightly dropped by 1.1%. The declining revenue has not hurt the company's bottom line, with increasing earnings per share.
  • The gross profit margin for CAMBIUM LEARNING GROUP INC is currently very high, coming in at 71.01%. 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 -21.19% is in-line with the industry average.

You can view the full analysis from the report here: Cambium Learning Group 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, VirtualScopics ( VSCP) was up $0.14 (2.9%) to $5.10 on heavy volume. Throughout the day, 14,304 shares of VirtualScopics exchanged hands as compared to its average daily volume of 6,100 shares. The stock ranged in a price between $5.00-$5.10 after having opened the day at $5.00 as compared to the previous trading day's close of $4.96.

VirtualScopics, Inc. provides imaging solutions for the pharmaceutical, biotechnology, and medical device industries. VirtualScopics has a market cap of $15.0 million and is part of the services sector. Shares are up 43.3% year-to-date as of the close of trading on Thursday. Currently there is 1 analyst who rates VirtualScopics 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 VirtualScopics as a sell. The company's weaknesses can be seen in multiple areas, such as its poor profit margins and generally disappointing historical performance in the stock itself.

Highlights from TheStreet Ratings analysis on VSCP go as follows:

  • The gross profit margin for VIRTUALSCOPICS INC is currently lower than what is desirable, coming in at 32.24%. Regardless of VSCP's low profit margin, it has managed to increase from the same period last year. Despite the mixed results of the gross profit margin, VSCP's net profit margin of -27.44% significantly underperformed when compared to the industry average.
  • VSCP has underperformed the S&P 500 Index, declining 15.44% from its price level of one year ago. 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.
  • Current return on equity exceeded its ROE from the same quarter one year prior. This is a clear sign of strength within the company. Compared to other companies in the Life Sciences Tools & Services industry and the overall market, VIRTUALSCOPICS INC's return on equity significantly trails that of both the industry average and the S&P 500.
  • VSCP, with its decline in revenue, underperformed when compared the industry average of 21.4%. Since the same quarter one year prior, revenues slightly dropped by 7.1%. The declining revenue has not hurt the company's bottom line, with increasing earnings per share.
  • Net operating cash flow has significantly increased by 66.23% to -$0.42 million when compared to the same quarter last year. Despite an increase in cash flow, VIRTUALSCOPICS INC's average is still marginally south of the industry average growth rate of 67.28%.

You can view the full analysis from the report here: VirtualScopics 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.

Bioanalytical Systems ( BASI) was another company that pushed the Diversified Services industry higher today. Bioanalytical Systems was up $0.04 (1.9%) to $2.20 on average volume. Throughout the day, 11,215 shares of Bioanalytical Systems exchanged hands as compared to its average daily volume of 11,300 shares. The stock ranged in a price between $2.15-$2.22 after having opened the day at $2.22 as compared to the previous trading day's close of $2.16.

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 $17.4 million and is part of the services sector. Shares are down 20.3% year-to-date as of the close of trading on Thursday. Currently there are no analysts who rate Bioanalytical Systems a buy, no analysts rate it a sell, and none rate it a hold.

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 67.28%.
  • Investors have driven up the company's shares by 68.46% 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

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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