3 Stocks Pushing The Services Sector 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 Services sector as a whole closed the day up 0.2% versus the S&P 500, which was up 0.1%. Laggards within the Services sector included Crystal Rock Holdings ( CRVP), down 1.9%, Point 360 ( PTSX), down 3.9%, NTN Buzztime ( NTN), down 3.9%, Tiger Media ( IDI), down 3.6% and Coast Distribution System ( CRV), down 2.1%.

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

Scholastic ( SCHL) is one of the companies that pushed the Services sector lower today. Scholastic was down $0.68 (2.0%) to $34.09 on light volume. Throughout the day, 64,232 shares of Scholastic exchanged hands as compared to its average daily volume of 132,000 shares. The stock ranged in price between $34.02-$35.45 after having opened the day at $34.67 as compared to the previous trading day's close of $34.77.

Scholastic Corporation operates as a children's publishing, education, and media company in the United States. Scholastic has a market cap of $1.0 billion and is part of the media industry. Shares are up 2.2% year-to-date as of the close of trading on Tuesday. Currently there is 1 analyst who rates Scholastic a buy, no analysts rate it a sell, and 1 rates it a hold.

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TheStreet Ratings rates Scholastic as a buy. The company's strengths can be seen in multiple areas, such as its revenue growth, growth in earnings per share, compelling growth in net income, largely solid financial position with reasonable debt levels by most measures and increase in stock price during the past year. We feel these strengths outweigh the fact that the company shows weak operating cash flow.

Highlights from TheStreet Ratings analysis on SCHL go as follows:

  • SCHL's revenue growth has slightly outpaced the industry average of 8.0%. Since the same quarter one year prior, revenues slightly increased by 8.4%. This growth in revenue appears to have trickled down to the company's bottom line, improving the earnings per share.
  • SCHOLASTIC CORP has improved earnings per share by 13.2% 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. We feel that this trend should continue. During the past fiscal year, SCHOLASTIC CORP increased its bottom line by earning $1.34 versus $1.03 in the prior year. This year, the market expects an improvement in earnings ($2.07 versus $1.34).
  • The company, on the basis of net income growth from the same quarter one year ago, has significantly outperformed against the S&P 500 and exceeded that of the Media industry average. The net income increased by 30.7% when compared to the same quarter one year prior, rising from $21.50 million to $28.10 million.
  • SCHL's debt-to-equity ratio is very low at 0.15 and is currently below that of the industry average, implying that there has been very successful management of debt levels. Despite the fact that SCHL's debt-to-equity ratio is low, the quick ratio, which is currently 0.64, displays a potential problem in covering short-term cash needs.
  • The stock has risen over the past year as investors have generally rewarded the company for its earnings growth and other positive factors like the ones we have cited in this report. Looking ahead, the stock's rise over the last year has already helped drive it to a level which is relatively expensive compared to the rest of its industry. We feel, however, that the other strengths this company displays justify these higher price levels.

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

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At the close, Tiger Media ( IDI) was down $0.02 (3.6%) to $0.52 on light volume. Throughout the day, 23,194 shares of Tiger Media exchanged hands as compared to its average daily volume of 43,600 shares. The stock ranged in price between $0.46-$0.53 after having opened the day at $0.52 as compared to the previous trading day's close of $0.54.

Tiger Media, Inc., a multi-platform media company, provides advertising services in the out-of-home advertising industry in the People's Republic of China. Tiger Media has a market cap of $19.6 million and is part of the media industry. Shares are down 64.2% year-to-date as of the close of trading on Tuesday.

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TheStreet Ratings rates Tiger Media as a sell. The company's weaknesses can be seen in multiple areas, such as its feeble growth in its earnings per share and generally disappointing historical performance in the stock itself.

Highlights from TheStreet Ratings analysis on IDI go as follows:

  • TIGER MEDIA INC reported flat earnings per share in the most recent quarter. The company has suffered a declining pattern earnings per share over the past two years. During the past fiscal year, TIGER MEDIA INC reported poor results of -$0.12 versus -$0.03 in the prior year.
  • IDI'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 64.06%, which is also worse than the performance of the S&P 500 Index. 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.
  • The company, on the basis of net income growth from the same quarter one year ago, has significantly underperformed compared to the Media industry average, but is greater than that of the S&P 500. The net income increased by 1.9% when compared to the same quarter one year prior, going from -$0.88 million to -$0.86 million.
  • Compared to other companies in the Media industry and the overall market, TIGER MEDIA INC's return on equity significantly trails that of both the industry average and the S&P 500.
  • IDI 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. Along with this, the company maintains a quick ratio of 2.75, which clearly demonstrates the ability to cover short-term cash needs.

You can view the full analysis from the report here: Tiger Media 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.

NTN Buzztime ( NTN) was another company that pushed the Services sector lower today. NTN Buzztime was down $0.02 (3.9%) to $0.37 on light volume. Throughout the day, 14,554 shares of NTN Buzztime exchanged hands as compared to its average daily volume of 51,100 shares. The stock ranged in price between $0.37-$0.39 after having opened the day at $0.38 as compared to the previous trading day's close of $0.38.

NTN Buzztime, Inc. provides an entertainment and marketing services platform for hospitality venues that offer games, events, and entertainment experiences in the United States and Canada. NTN Buzztime has a market cap of $36.5 million and is part of the media industry. Shares are down 38.9% year-to-date as of the close of trading on Tuesday.

TheStreet Ratings rates NTN Buzztime as a sell. The company's weaknesses can be seen in multiple areas, such as its deteriorating net income, disappointing return on equity and weak operating cash flow.

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Highlights from TheStreet Ratings analysis on NTN 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 Media industry. The net income has significantly decreased by 1261.6% when compared to the same quarter one year ago, falling from -$0.10 million to -$1.35 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, NTN BUZZTIME 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 -$1.79 million or 1092.22% when compared to the same quarter last year. In addition, when comparing to the industry average, the firm's growth rate is much lower.
  • This stock has managed to decline in share value by 2.56% over the past twelve months. Regardless of the rise in share value over the previous year, we feel that the risks involved in investing in this stock do not compensate for any future upside potential.
  • NTN BUZZTIME INC's earnings have gone downhill when comparing its most recently reported quarter with the same quarter a year earlier. Stable Earnings per share over the past year indicate the company has sound management over its earnings and share float. During the past fiscal year, NTN BUZZTIME INC continued to lose money by earning -$0.01 versus -$0.02 in the prior year.

You can view the full analysis from the report here: NTN Buzztime 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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