3 Stocks Moving The Services Sector Upward

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 25 points (0.1%) at 17,157 as of Wednesday, Sept. 17, 2014, 4:20 PM ET. The NYSE advances/declines ratio sits at 1,585 issues advancing vs. 1,500 declining with 127 unchanged.

The Services sector as a whole closed the day up 0.2% versus the S&P 500, which was up 0.1%. Top gainers within the Services sector included General Employment ( JOB), up 6.9%, Radio One ( ROIA), up 4.3%, Wilhelmina International ( WHLMD), up 2.6%, Wilhelmina International ( WHLM), up 2.6% and RLJ Entertainment ( RLJE), up 19.4%.

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

RLJ Entertainment ( RLJE) is one of the companies that pushed the Services sector higher today. RLJ Entertainment was up $0.46 (19.4%) to $2.83 on heavy volume. Throughout the day, 27,990 shares of RLJ Entertainment exchanged hands as compared to its average daily volume of 8,500 shares. The stock ranged in a price between $2.42-$3.21 after having opened the day at $2.43 as compared to the previous trading day's close of $2.37.

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 $30.2 million and is part of the specialty retail industry. Shares are down 50.5% year-to-date as of the close of trading on Tuesday. Currently there are no analysts who rate RLJ Entertainment 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 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.

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 58.78%, 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.

At the close, Wilhelmina International ( WHLM) was up $0.16 (2.6%) to $6.21 on light volume. Throughout the day, 745 shares of Wilhelmina International exchanged hands as compared to its average daily volume of 2,700 shares. The stock ranged in a price between $6.21-$6.41 after having opened the day at $6.41 as compared to the previous trading day's close of $6.05.

Wilhelmina International has a market cap of $37.7 million and is part of the specialty retail industry. Shares are up 0.8% year-to-date as of the close of trading on Tuesday.

STOCKS TO BUY: TheStreet Quant Ratings has identified a handful of stocks that can potentially TRIPLE in the next 12 months. Learn more.

Radio One ( ROIA) was another company that pushed the Services sector higher today. Radio One was up $0.13 (4.3%) to $3.18 on light volume. Throughout the day, 331 shares of Radio One exchanged hands as compared to its average daily volume of 2,400 shares. The stock ranged in a price between $3.18-$3.18 after having opened the day at $3.18 as compared to the previous trading day's close of $3.05.

Radio One, Inc., together with its subsidiaries, operates as an urban-oriented multi-media company in the United States. The company operates through four segments: Radio Broadcasting, Reach Media, Internet, and Cable Television. Radio One has a market cap of $7.0 million and is part of the specialty retail industry. Shares are down 19.7% year-to-date as of the close of trading on Tuesday. Currently there are no analysts who rate Radio One a buy, no analysts rate it a sell, and none rate it a hold.

TheStreet Ratings rates Radio One as a sell. The company's weaknesses can be seen in multiple areas, such as its disappointing return on equity and generally high debt management risk.

Highlights from TheStreet Ratings analysis on ROIA 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, RADIO ONE INC's return on equity significantly trails that of both the industry average and the S&P 500.
  • The debt-to-equity ratio is very high at 19.00 and currently higher than the industry average, implying increased risk associated with the management of debt levels within the company. Despite the company's weak debt-to-equity ratio, the company has managed to keep a very strong quick ratio of 2.63, which shows the ability to cover short-term cash needs.
  • The gross profit margin for RADIO ONE INC is rather high; currently it is at 68.71%. Regardless of ROIA's high profit margin, it has managed to decrease from the same period last year. Despite the mixed results of the gross profit margin, ROIA's net profit margin of -9.97% significantly underperformed when compared to the industry average.
  • ROIA, with its decline in revenue, underperformed when compared the industry average of 8.0%. Since the same quarter one year prior, revenues slightly dropped by 9.3%. The declining revenue has not hurt the company's bottom line, with increasing earnings per share.
  • RADIO ONE INC has improved earnings per share by 20.7% 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, RADIO ONE INC continued to lose money by earning -$1.30 versus -$1.33 in the prior year.

You can view the full analysis from the report here: Radio One 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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