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 down 1.2% versus the S&P 500, which was down 0.1%. Laggards within the Diversified Services industry included RLJ Entertainment ( RLJE), down 4.6%, PDI ( PDII), down 6.7%, China Yida ( CNYD), down 7.2%, Amrep ( AXR), down 1.9% and EnviroStar ( EVI), down 11.1%.

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

China Yida ( CNYD) is one of the companies that pushed the Diversified Services industry lower today. China Yida was down $0.26 (7.2%) to $3.36 on average volume. Throughout the day, 12,318 shares of China Yida exchanged hands as compared to its average daily volume of 13,700 shares. The stock ranged in price between $3.27-$3.58 after having opened the day at $3.55 as compared to the previous trading day's close of $3.62.

China Yida Holding Co., together with its subsidiaries, is engaged in the tourism and advertisement businesses in the People's Republic of China. The company operates through two segments, Advertisement and Tourism. China Yida has a market cap of $14.2 million and is part of the services sector. Shares are up 25.7% year-to-date as of the close of trading on Friday.

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TheStreet Ratings rates China Yida 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 CNYD go as follows:

  • CHINA YIDA HOLDING CO's earnings per share declined by 26.5% 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, CHINA YIDA HOLDING CO swung to a loss, reporting -$4.37 versus $0.06 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 61.5% when compared to the same quarter one year ago, falling from -$3.12 million to -$5.03 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, CHINA YIDA HOLDING CO's return on equity significantly trails that of both the industry average and the S&P 500.
  • The share price of CHINA YIDA HOLDING CO has not done very well: it is down 16.00% 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.
  • CNYD, with its decline in revenue, underperformed when compared the industry average of 12.3%. Since the same quarter one year prior, revenues fell by 10.6%. Weakness in the company's revenue seems to have hurt the bottom line, decreasing earnings per share.

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

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At the close, PDI ( PDII) was down $0.18 (6.7%) to $2.51 on average volume. Throughout the day, 13,019 shares of PDI exchanged hands as compared to its average daily volume of 17,300 shares. The stock ranged in price between $2.51-$2.68 after having opened the day at $2.68 as compared to the previous trading day's close of $2.69.

PDI, Inc. provides outsourced commercial services to pharmaceutical, biotechnology, and healthcare companies in the United States. PDI has a market cap of $41.5 million and is part of the services sector. Shares are down 44.1% year-to-date as of the close of trading on Friday. Currently there is 1 analyst who rates PDI a buy, no analysts rate it a sell, and 1 rates it a hold.

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TheStreet Ratings rates PDI as a sell. The company's weaknesses can be seen in multiple areas, such as its unimpressive growth in net income, poor profit margins, weak operating cash flow, generally disappointing historical performance in the stock itself and feeble growth in its earnings per share.

Highlights from TheStreet Ratings analysis on PDII go as follows:

  • 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 Health Care Providers & Services industry. The net income has significantly decreased by 200.7% when compared to the same quarter one year ago, falling from -$0.88 million to -$2.66 million.
  • The gross profit margin for PDI INC is rather low; currently it is at 16.38%. It has decreased from the same quarter the previous year. Along with this, the net profit margin of -8.41% is significantly below that of the industry average.
  • Net operating cash flow has declined marginally to -$1.83 million or 1.61% when compared to the same quarter last year. In addition, when comparing the cash generation rate to the industry average, the firm's growth is significantly lower.
  • Despite any intermediate fluctuations, we have only bad news to report on this stock's performance over the last year: it has tumbled by 45.83%, worse than the S&P 500's performance. Consistent with the plunge in the stock price, the company's earnings per share are down 183.33% 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.
  • PDI 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. This company has reported somewhat volatile earnings recently. We feel it is likely to report a decline in earnings in the coming year. During the past fiscal year, PDI INC continued to lose money by earning -$0.31 versus -$1.75 in the prior year. For the next year, the market is expecting a contraction of 111.3% in earnings (-$0.66 versus -$0.31).

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

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RLJ Entertainment ( RLJE) was another company that pushed the Diversified Services industry lower today. RLJ Entertainment was down $0.11 (4.6%) to $2.28 on light volume. Throughout the day, 4,765 shares of RLJ Entertainment exchanged hands as compared to its average daily volume of 7,600 shares. The stock ranged in price between $2.28-$2.37 after having opened the day at $2.30 as compared to the previous trading day's close of $2.39.

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 $30.8 million and is part of the services sector. Shares are down 50.1% year-to-date as of the close of trading on Friday.

TheStreet Ratings rates RLJ Entertainment as a sell. The company's weaknesses can be seen in multiple areas, such as its disappointing return on equity, weak operating cash flow, 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:

  • 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.
  • Net operating cash flow has significantly decreased to $0.17 million or 97.99% 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 gross profit margin for RLJ ENTERTAINMENT INC is currently lower than what is desirable, coming in at 30.90%. Despite the low profit margin, it has increased significantly from the same period last year. Despite the mixed results of the gross profit margin, RLJE's net profit margin of -7.10% significantly underperformed when compared to the industry average.
  • RLJE's stock share price has done very poorly compared to where it was a year ago: Despite any rallies, the net result is that it is down by 52.50%, which is also worse that the performance of the S&P 500 Index. Investors have so far failed to pay much attention to the earnings improvements the company has managed to achieve over the last 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.
  • RLJ ENTERTAINMENT INC reported significant earnings per share improvement in the most recent quarter compared to the same quarter a year ago. 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, RLJ ENTERTAINMENT INC reported poor results of -$2.30 versus -$0.49 in the prior year.

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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