3 Stocks Advancing The Specialty Retail Industry

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 55 points (0.3%) at 17,069 as of Wednesday, Sept. 10, 2014, 4:20 PM ET. The NYSE advances/declines ratio sits at 1,628 issues advancing vs. 1,421 declining with 145 unchanged.

The Specialty Retail industry as a whole closed the day down 0.1% versus the S&P 500, which was up 0.4%. Top gainers within the Specialty Retail industry included Birks Group ( BGI), up 3.9%, DGSE Companies ( DGSE), up 3.5%, Lentuo International ( LAS), up 2.9%, West Marine ( WMAR), up 2.6% and Cencosud ( CNCO), up 1.6%.

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

Cencosud ( CNCO) is one of the companies that pushed the Specialty Retail industry higher today. Cencosud was up $0.14 (1.6%) to $9.07 on light volume. Throughout the day, 50,915 shares of Cencosud exchanged hands as compared to its average daily volume of 80,100 shares. The stock ranged in a price between $8.85-$9.09 after having opened the day at $8.89 as compared to the previous trading day's close of $8.93.

Cencosud S.A., together with its subsidiaries, operates as a multi-brand retailer in Argentina, Brazil, Chile, Peru, and Colombia. Cencosud has a market cap of $8.5 billion and is part of the services sector. Shares are down 18.0% year-to-date as of the close of trading on Tuesday. Currently there is 1 analyst who rates Cencosud a buy, no analysts rate it a sell, and 3 rate it a hold.

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TheStreet Ratings rates Cencosud 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 poor profit margins, generally higher debt management risk and a generally disappointing performance in the stock itself.

Highlights from TheStreet Ratings analysis on CNCO go as follows:

  • CNCO's revenue growth has slightly outpaced the industry average of 3.4%. Since the same quarter one year prior, revenues slightly increased by 0.8%. 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 Food & Staples Retailing industry. The net income increased by 239.6% when compared to the same quarter one year prior, rising from $13.12 million to $44.54 million.
  • CNCO's debt-to-equity ratio of 0.68 is somewhat low overall, but it is high when compared to the industry average, implying that the management of the debt levels should be evaluated further. Even though the debt-to-equity ratio shows mixed results, the company's quick ratio of 0.31 is very low and demonstrates very weak liquidity.
  • The gross profit margin for CENCOSUD SA is currently lower than what is desirable, coming in at 26.66%. It has decreased from the same quarter the previous year. Along with this, the net profit margin of 0.94% trails that of the industry average.

You can view the full analysis from the report here: Cencosud 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, West Marine ( WMAR) was up $0.27 (2.6%) to $10.54 on light volume. Throughout the day, 20,599 shares of West Marine exchanged hands as compared to its average daily volume of 64,600 shares. The stock ranged in a price between $10.18-$10.59 after having opened the day at $10.30 as compared to the previous trading day's close of $10.27.

West Marine, Inc. operates as a specialty retailer of boating supplies, gear, apparel, footwear, and other water life-related products primarily in the United States. West Marine has a market cap of $253.5 million and is part of the services sector. Shares are down 27.8% year-to-date as of the close of trading on Tuesday. Currently there is 1 analyst who rates West Marine 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 West Marine as a hold. The company's strengths can be seen in multiple areas, such as its largely solid financial position with reasonable debt levels by most measures, good cash flow from operations and expanding profit margins. However, as a counter to these strengths, we also find weaknesses including a generally disappointing performance in the stock itself, feeble growth in the company's earnings per share and deteriorating net income.

Highlights from TheStreet Ratings analysis on WMAR go as follows:

  • WMAR 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. Despite the fact that WMAR's debt-to-equity ratio is low, the quick ratio, which is currently 0.51, displays a potential problem in covering short-term cash needs.
  • Net operating cash flow has slightly increased to $37.16 million or 8.23% when compared to the same quarter last year. Despite an increase in cash flow, WEST MARINE INC's cash flow growth rate is still lower than the industry average growth rate of 21.88%.
  • Regardless of the drop in revenue, the company managed to outperform against the industry average of 0.3%. Since the same quarter one year prior, revenues slightly dropped by 0.1%. Weakness in the company's revenue seems to have hurt the bottom line, decreasing earnings per share.
  • WEST MARINE INC's earnings per share declined by 16.7% in the most recent quarter compared to 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, WEST MARINE INC reported lower earnings of $0.29 versus $0.64 in the prior year. For the next year, the market is expecting a contraction of 29.3% in earnings ($0.21 versus $0.29).
  • The company, on the basis of change in net income from the same quarter one year ago, has underperformed when compared to that of the S&P 500 and greatly underperformed compared to the Specialty Retail industry average. The net income has decreased by 17.7% when compared to the same quarter one year ago, dropping from $22.24 million to $18.30 million.

You can view the full analysis from the report here: West Marine 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.

Lentuo International ( LAS) was another company that pushed the Specialty Retail industry higher today. Lentuo International was up $0.07 (2.9%) to $2.47 on average volume. Throughout the day, 155,208 shares of Lentuo International exchanged hands as compared to its average daily volume of 117,400 shares. The stock ranged in a price between $2.37-$2.64 after having opened the day at $2.61 as compared to the previous trading day's close of $2.40.

Lentuo International Inc. operates automobile franchise dealerships in the People's Republic of China. Lentuo International has a market cap of $81.7 million and is part of the services sector. Shares are down 12.7% year-to-date as of the close of trading on Tuesday. Currently there are no analysts who rate Lentuo International a buy, no analysts rate it a sell, and none rate it a hold.

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 has underperformed the S&P 500 Index, declining 11.84% 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.
  • 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.

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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