3 Diversified Services Stocks Pushing Industry Growth

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 are trading down today with the Dow Jones Industrial Average ( ^DJI) trading down 116.81 points (-0.7%) at 17,056 as of Tuesday, Sept. 23, 2014, 4:20 PM ET. The NYSE advances/declines ratio sits at 891 issues advancing vs. 2,185 declining with 134 unchanged.

The Diversified Services industry as a whole closed the day down 0.9% versus the S&P 500, which was down 0.6%. Top gainers within the Diversified Services industry included Bioanalytical Systems ( BASI), up 4.9%, Birner Dental Management Services ( BDMS), up 2.1%, Onvia ( ONVI), up 2.4%, AeroCentury ( ACY), up 1.6% and Newtek Business Services ( NEWT), up 1.8%.

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

Newtek Business Services ( NEWT) is one of the companies that pushed the Diversified Services industry higher today. Newtek Business Services was up $0.05 (1.8%) to $2.91 on heavy volume. Throughout the day, 75,234 shares of Newtek Business Services exchanged hands as compared to its average daily volume of 43,800 shares. The stock ranged in a price between $2.82-$2.91 after having opened the day at $2.87 as compared to the previous trading day's close of $2.86.

Newtek Business Services, Inc. provides financial and business services to the small-and medium-sized business market in the United States and internationally. Newtek Business Services has a market cap of $105.8 million and is part of the services sector. Shares are down 8.9% year-to-date as of the close of trading on Monday. Currently there are no analysts who rate Newtek Business Services 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 Newtek Business Services as a hold. The company's strengths can be seen in multiple areas, such as its revenue growth, attractive valuation levels and largely solid financial position with reasonable debt levels by most measures. However, as a counter to these strengths, we also find weaknesses including unimpressive growth in net income, disappointing return on equity and weak operating cash flow.

Highlights from TheStreet Ratings analysis on NEWT go as follows:

  • The revenue growth came in higher than the industry average of 12.3%. Since the same quarter one year prior, revenues slightly increased by 3.0%. This growth in revenue does not appear to have trickled down to the company's bottom line, displayed by a decline in earnings per share.
  • NEWTEK BUSINESS SERVICES INC's earnings per share declined by 20.0% in the most recent quarter compared to the same quarter a year ago. This company has reported somewhat volatile earnings recently. But, we feel it is poised for EPS growth in the coming year. During the past fiscal year, NEWTEK BUSINESS SERVICES INC increased its bottom line by earning $0.20 versus $0.14 in the prior year. This year, the market expects an improvement in earnings ($0.25 versus $0.20).
  • The company's current return on equity has slightly decreased from the same quarter one year prior. This implies a minor weakness in the organization. In comparison to the other companies in the IT Services industry and the overall market, NEWTEK BUSINESS SERVICES INC's return on equity is significantly below that of the industry average and is below that of the S&P 500.
  • 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 IT Services industry. The net income has decreased by 24.3% when compared to the same quarter one year ago, dropping from $1.84 million to $1.39 million.

You can view the full analysis from the report here: Newtek Business Services 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, AeroCentury ( ACY) was up $0.18 (1.6%) to $11.28 on heavy volume. Throughout the day, 6,089 shares of AeroCentury exchanged hands as compared to its average daily volume of 4,000 shares. The stock ranged in a price between $11.00-$11.31 after having opened the day at $11.15 as compared to the previous trading day's close of $11.10.

AeroCentury Corp. acquires and invests in used regional aircraft and aircraft engines for lease to regional carriers worldwide. As of February 28, 2014, the company owned 9 Bombardier Dash-8-300, 3 Bombardier CRJ-700, 7 Fokker 100, 3 Bombardier Dash-8-Q400, and 1 Bombardier CRJ-705 aircraft. AeroCentury has a market cap of $17.1 million and is part of the services sector. Shares are down 35.4% year-to-date as of the close of trading on Monday. Currently there is 1 analyst who rates AeroCentury 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 AeroCentury 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, generally high debt management risk, disappointing return on equity and weak operating cash flow.

Highlights from TheStreet Ratings analysis on ACY go as follows:

  • AEROCENTURY CORP 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. Earnings per share have declined over the last year. We anticipate that this should continue in the coming year. During the past fiscal year, AEROCENTURY CORP reported lower earnings of $2.13 versus $3.31 in the prior year. For the next year, the market is expecting a contraction of 216.9% in earnings (-$2.49 versus $2.13).
  • 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 Trading Companies & Distributors industry. The net income has significantly decreased by 393.5% when compared to the same quarter one year ago, falling from $1.34 million to -$3.92 million.
  • The debt-to-equity ratio is very high at 2.38 and currently higher than the industry average, implying increased risk associated with the management of debt levels within the company.
  • 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 Trading Companies & Distributors industry and the overall market, AEROCENTURY CORP'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 $0.25 million or 88.48% 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: AeroCentury 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.

Bioanalytical Systems ( BASI) was another company that pushed the Diversified Services industry higher today. Bioanalytical Systems was up $0.12 (4.9%) to $2.52 on heavy volume. Throughout the day, 17,197 shares of Bioanalytical Systems exchanged hands as compared to its average daily volume of 11,300 shares. The stock ranged in a price between $2.45-$2.52 after having opened the day at $2.45 as compared to the previous trading day's close of $2.40.

Bioanalytical Systems, Inc. provides drug discovery and development services, and analytical instruments for pharmaceutical, biotechnology, academic, and government organizations in North America, the Pacific Rim, Europe, and internationally. Bioanalytical Systems has a market cap of $20.2 million and is part of the services sector. Shares are down 7.7% year-to-date as of the close of trading on Monday. Currently there are no analysts who rate Bioanalytical Systems a buy, no analysts rate it a sell, and none rate it a hold.

TheStreet Ratings rates Bioanalytical Systems as a sell. The company's weaknesses can be seen in multiple areas, such as its unimpressive growth in net income and weak operating cash flow.

Highlights from TheStreet Ratings analysis on BASI 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 Life Sciences Tools & Services industry. The net income has significantly decreased by 62.7% when compared to the same quarter one year ago, falling from $0.58 million to $0.22 million.
  • Net operating cash flow has significantly decreased to $0.21 million or 75.43% 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 company's current return on equity greatly increased when compared to its ROE from the same quarter one year prior. This is a signal of significant strength within the corporation. Compared to other companies in the Life Sciences Tools & Services industry and the overall market, BIOANALYTICAL SYSTEMS INC's return on equity significantly trails that of both the industry average and the S&P 500.
  • BIOANALYTICAL SYSTEMS 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 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, BIOANALYTICAL SYSTEMS INC turned its bottom line around by earning $0.09 versus -$0.87 in the prior year.
  • 39.46% is the gross profit margin for BIOANALYTICAL SYSTEMS INC which we consider to be strong. Regardless of BASI's high profit margin, it has managed to decrease from the same period last year. Despite the mixed results of the gross profit margin, the net profit margin of 3.56% trails the industry average.

You can view the full analysis from the report here: Bioanalytical Systems 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.

More from Markets

Jim Cramer: The 10-Year Yield Could Go to 2.75%

Jim Cramer: The 10-Year Yield Could Go to 2.75%

Oil Slumps, Gas Spikes Ahead of Holiday Weekend; Assessing the Chipmakers--ICYMI

Oil Slumps, Gas Spikes Ahead of Holiday Weekend; Assessing the Chipmakers--ICYMI

Week Ahead: Wall Street Looks to Jobs Report as North Korea Meeting Less Certain

Week Ahead: Wall Street Looks to Jobs Report as North Korea Meeting Less Certain

Dow and S&P 500 Decline, Energy Shares Fall as U.S. Crude Oil Slides 4%

Dow and S&P 500 Decline, Energy Shares Fall as U.S. Crude Oil Slides 4%

Replay: Jim Cramer on the Markets, 10-Year Yield, Oil Prices and Foot Locker

Replay: Jim Cramer on the Markets, 10-Year Yield, Oil Prices and Foot Locker