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 up 0.3% versus the S&P 500, which was up 0.5%. Laggards within the Diversified Services industry included General Employment ( JOB), down 5.4%, Spar Group ( SGRP), down 5.8%, Internet Patents ( PTNT), down 1.6%, Command Security ( MOC), down 2.9% and AeroCentury ( ACY), down 3.9%.

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

AeroCentury ( ACY) is one of the companies that pushed the Diversified Services industry lower today. AeroCentury was down $0.46 (3.9%) to $11.35 on heavy volume. Throughout the day, 6,234 shares of AeroCentury exchanged hands as compared to its average daily volume of 3,500 shares. The stock ranged in price between $11.35-$11.69 after having opened the day at $11.35 as compared to the previous trading day's close of $11.81.

AeroCentury Corp. acquires and invests in used regional aircraft and aircraft engines for lease to regional carriers worldwide. As of February 28, 2014, the company owned 9 Bombardier Dash-8-300, 3 Bombardier CRJ-700, 7 Fokker 100, 3 Bombardier Dash-8-Q400, and 1 Bombardier CRJ-705 aircraft. AeroCentury has a market cap of $18.1 million and is part of the services sector. Shares are down 31.7% year-to-date as of the close of trading on Thursday. Currently there is 1 analyst who rates AeroCentury a buy, no analysts rate it a sell, and none rate it a hold.

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TheStreet Ratings rates AeroCentury 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 ACY go as follows:

  • AEROCENTURY CORP 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 year. We anticipate that this should continue in the coming year. During the past fiscal year, AEROCENTURY CORP reported lower earnings of $2.13 versus $3.31 in the prior year. For the next year, the market is expecting a contraction of 216.9% in earnings (-$2.49 versus $2.13).
  • 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 Trading Companies & Distributors industry. The net income has significantly decreased by 393.5% when compared to the same quarter one year ago, falling from $1.34 million to -$3.92 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 Trading Companies & Distributors industry and the overall market, AEROCENTURY CORP'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 42.04%, worse than the S&P 500's performance. Consistent with the plunge in the stock price, the company's earnings per share are down 402.38% 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.
  • 46.18% is the gross profit margin for AEROCENTURY CORP which we consider to be strong. Regardless of ACY's high profit margin, it has managed to decrease from the same period last year. Despite the mixed results of the gross profit margin, ACY's net profit margin of -55.61% significantly underperformed when compared to the industry average.

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

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At the close, Command Security ( MOC) was down $0.07 (2.9%) to $2.33 on light volume. Throughout the day, 5,207 shares of Command Security exchanged hands as compared to its average daily volume of 14,500 shares. The stock ranged in price between $2.33-$2.45 after having opened the day at $2.45 as compared to the previous trading day's close of $2.40.

Command Security Corporation provides uniformed security officers and aviation security services to commercial, financial, industrial, aviation, and governmental customers in the United States. The company operates through Security and Aviation Safeguards divisions. Command Security has a market cap of $22.0 million and is part of the services sector. Shares are up 16.5% year-to-date as of the close of trading on Thursday.

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TheStreet Ratings rates Command Security as a hold. The company's strengths can be seen in multiple areas, such as its solid stock price performance, impressive record of earnings per share growth and revenue growth. However, as a counter to these strengths, we find that the company's profit margins have been poor overall.

Highlights from TheStreet Ratings analysis on MOC go as follows:

  • Powered by its strong earnings growth of 80.00% and other important driving factors, this stock has surged by 55.00% over the past year, outperforming the rise in the S&P 500 Index during the same period. Although MOC had significant growth over the past year, our hold rating indicates that we do not recommend additional investment in this stock at the current time.
  • COMMAND SECURITY CORP 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 two years. During the past fiscal year, COMMAND SECURITY CORP increased its bottom line by earning $0.12 versus $0.04 in the prior year.
  • The company, on the basis of net income growth from the same quarter one year ago, has significantly underperformed compared to the Commercial Services & Supplies industry average, but is greater than that of the S&P 500. The net income increased by 67.2% when compared to the same quarter one year prior, rising from -$0.42 million to -$0.14 million.
  • The gross profit margin for COMMAND SECURITY CORP is currently extremely low, coming in at 13.03%. It has decreased from the same quarter the previous year. Along with this, the net profit margin of -0.35% is significantly below that of the industry average.

You can view the full analysis from the report here: Command Security 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.

Spar Group ( SGRP) was another company that pushed the Diversified Services industry lower today. Spar Group was down $0.09 (5.8%) to $1.40 on heavy volume. Throughout the day, 22,500 shares of Spar Group exchanged hands as compared to its average daily volume of 14,300 shares. The stock ranged in price between $1.40-$1.53 after having opened the day at $1.49 as compared to the previous trading day's close of $1.49.

SPAR Group Inc., together with its subsidiaries, provides merchandising and other marketing services worldwide. Spar Group has a market cap of $28.8 million and is part of the services sector. Shares are down 24.8% year-to-date as of the close of trading on Thursday.

TheStreet Ratings rates Spar Group as a hold. The company's strengths can be seen in multiple areas, such as its revenue growth, largely solid financial position with reasonable debt levels by most measures and reasonable valuation levels. However, as a counter to these strengths, we also find weaknesses including unimpressive growth in net income, poor profit margins and weak operating cash flow.

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Highlights from TheStreet Ratings analysis on SGRP 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 rose by 12.2%. 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.
  • SGRP's debt-to-equity ratio is very low at 0.24 and is currently below that of the industry average, implying that there has been very successful management of debt levels. To add to this, SGRP has a quick ratio of 2.08, which demonstrates the ability of the company to cover short-term liquidity needs.
  • SPAR GROUP INC's earnings have gone downhill when comparing its most recently reported quarter with the same quarter a year earlier. This company has not demonstrated a clear trend in earnings over the past 2 years, making it difficult to accurately predict earnings for the coming year. During the past fiscal year, SPAR GROUP INC increased its bottom line by earning $0.15 versus $0.13 in the prior year.
  • Net operating cash flow has significantly decreased to $2.47 million or 50.56% when compared to the same quarter last year. In addition, when comparing to the industry average, the firm's growth rate is much lower.
  • 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 938.6% when compared to the same quarter one year ago, falling from $0.04 million to -$0.37 million.

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

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