3 Services Stocks Nudging The Sector Higher

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All three major indices traded up today with the Dow Jones Industrial Average ( ^DJI) trading up 101 points (0.6%) at 17,132 as of Tuesday, Sept. 16, 2014, 4:20 PM ET. The NYSE advances/declines ratio sits at 1,961 issues advancing vs. 1,099 declining with 138 unchanged.

The Services sector as a whole closed the day up 0.3% versus the S&P 500, which was up 0.7%. Top gainers within the Services sector included Bowl America ( BWL.A), up 4.7%, QKL Stores ( QKLS), up 2.5%, Point 360 ( PTSX), up 9.7%, RLJ Entertainment ( RLJE), up 4.0% and Spar Group ( SGRP), up 8.9%.

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

Spar Group ( SGRP) is one of the companies that pushed the Services sector higher today. Spar Group was up $0.14 (8.9%) to $1.65 on heavy volume. Throughout the day, 400,805 shares of Spar Group exchanged hands as compared to its average daily volume of 13,700 shares. The stock ranged in a price between $1.51-$1.98 after having opened the day at $1.51 as compared to the previous trading day's close of $1.52.

SPAR Group Inc., together with its subsidiaries, provides merchandising and other marketing services worldwide. Spar Group has a market cap of $29.4 million and is part of the media industry. Shares are down 27.8% year-to-date as of the close of trading on Monday. Currently there are no analysts who rate Spar Group a buy, no analysts rate it a sell, and none rate it a hold.

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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 notable return on equity. However, as a counter to these strengths, we also find weaknesses including weak operating cash flow, poor profit margins and a generally disappointing performance in the stock itself.

Highlights from TheStreet Ratings analysis on SGRP go as follows:

  • SGRP's revenue growth has slightly outpaced the industry average of 8.0%. Since the same quarter one year prior, revenues rose by 12.8%. This growth in revenue appears to have trickled down to the company's bottom line, improving the earnings per share.
  • The current debt-to-equity ratio, 0.39, is low and is below the industry average, implying that there has been successful management of debt levels. To add to this, SGRP has a quick ratio of 2.18, which demonstrates the ability of the company to cover short-term liquidity needs.
  • SPAR GROUP INC 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, SPAR GROUP INC increased its bottom line by earning $0.15 versus $0.13 in the prior year.
  • The gross profit margin for SPAR GROUP INC is rather low; currently it is at 24.90%. Regardless of SGRP's low profit margin, it has managed to increase from the same period last year. Despite the mixed results of the gross profit margin, SGRP's net profit margin of 1.86% is significantly lower than the industry average.
  • Net operating cash flow has significantly decreased to -$1.92 million or 197.21% 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: Spar Group Ratings Report

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