3 Stocks Pushing The Specialty Retail 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 Specialty Retail industry as a whole closed the day down 1.2% versus the S&P 500, which was down 1.6%. Laggards within the Specialty Retail industry included China Auto Logistics ( CALI), down 6.4%, DGSE Companies ( DGSE), down 3.5%, Mecox Lane ( MCOX), down 3.7%, CSS Industries ( CSS), down 2.1% and Odyssey Marine Exploration ( OMEX), down 3.3%.

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

CSS Industries ( CSS) is one of the companies that pushed the Specialty Retail industry lower today. CSS Industries was down $0.52 (2.1%) to $23.97 on light volume. Throughout the day, 11,526 shares of CSS Industries exchanged hands as compared to its average daily volume of 17,200 shares. The stock ranged in price between $23.90-$24.46 after having opened the day at $24.18 as compared to the previous trading day's close of $24.49.

CSS Industries, Inc., a consumer products company, is engaged in the design, manufacture, procurement, distribution, and sale of various occasion and seasonal social expression products primarily to mass market retailers primarily in the United States and Canada. CSS Industries has a market cap of $225.6 million and is part of the financial sector. Shares are down 14.6% year-to-date as of the close of trading on Wednesday.

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TheStreet Ratings rates CSS Industries as a buy. 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, compelling growth in net income, reasonable valuation levels and impressive record of earnings per share growth. We feel these strengths outweigh the fact that the company shows low profit margins.

Highlights from TheStreet Ratings analysis on CSS go as follows:

  • CSS's revenue growth has slightly outpaced the industry average of 5.3%. Since the same quarter one year prior, revenues slightly increased by 2.4%. This growth in revenue appears to have trickled down to the company's bottom line, improving the earnings per share.
  • CSS 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 3.70, which clearly demonstrates the ability to cover short-term cash needs.
  • The net income growth from the same quarter one year ago has greatly exceeded that of the S&P 500, but is less than that of the Household Durables industry average. The net income increased by 20.5% when compared to the same quarter one year prior, going from -$1.67 million to -$1.33 million.
  • CSS INDUSTRIES INC has improved earnings per share by 22.2% 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. During the past fiscal year, CSS INDUSTRIES INC increased its bottom line by earning $1.97 versus $1.62 in the prior year.

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

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At the close, Mecox Lane ( MCOX) was down $0.16 (3.7%) to $4.08 on light volume. Throughout the day, 2,460 shares of Mecox Lane exchanged hands as compared to its average daily volume of 15,700 shares. The stock ranged in price between $4.04-$4.25 after having opened the day at $4.25 as compared to the previous trading day's close of $4.24.

Mecox Lane Limited designs and sells apparel, accessories, and home and healthcare products through its online platform and stores in the People's Republic of China. Mecox Lane has a market cap of $49.9 million and is part of the financial sector. Shares are up 16.1% year-to-date as of the close of trading on Wednesday.

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TheStreet Ratings rates Mecox Lane 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 MCOX go as follows:

  • MECOX LANE LTD's earnings per share declined by 25.0% in the most recent quarter compared to the same quarter a year ago. The company has suffered a declining pattern earnings per share over the past two years. During the past fiscal year, MECOX LANE LTD reported poor results of -$2.20 versus -$1.95 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 Internet & Catalog Retail industry. The net income has significantly decreased by 37.3% when compared to the same quarter one year ago, falling from -$4.23 million to -$5.80 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 Internet & Catalog Retail industry and the overall market, MECOX LANE LTD's return on equity significantly trails that of both the industry average and the S&P 500.
  • In its most recent trading session, MCOX has closed at a price level that was not very different from its closing price of one year earlier. This is probably due to its weak earnings growth as well as other mixed factors. 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.
  • MCOX, with its decline in revenue, underperformed when compared the industry average of 7.2%. Since the same quarter one year prior, revenues slightly dropped by 8.5%. The declining revenue appears to have seeped down to the company's bottom line, decreasing earnings per share.

You can view the full analysis from the report here: Mecox Lane 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.

China Auto Logistics ( CALI) was another company that pushed the Specialty Retail industry lower today. China Auto Logistics was down $0.11 (6.4%) to $1.61 on light volume. Throughout the day, 8,349 shares of China Auto Logistics exchanged hands as compared to its average daily volume of 26,500 shares. The stock ranged in price between $1.58-$1.75 after having opened the day at $1.74 as compared to the previous trading day's close of $1.72.

China Auto Logistics Inc. sells and trades in imported automobiles in the People's Republic of China. China Auto Logistics has a market cap of $6.9 million and is part of the financial sector. Shares are down 51.7% year-to-date as of the close of trading on Wednesday.

TheStreet Ratings rates China Auto Logistics 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 poor profit margins.

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Highlights from TheStreet Ratings analysis on CALI go as follows:

  • The debt-to-equity ratio is very high at 3.51 and currently higher than the industry average, implying increased risk associated with the management of debt levels within the company. Along with the unfavorable debt-to-equity ratio, CALI maintains a poor quick ratio of 0.72, which illustrates the inability to avoid short-term cash problems.
  • Current return on equity is lower than its ROE from the same quarter one year prior. This is a clear sign of weakness within the company. Compared to other companies in the Specialty Retail industry and the overall market, CHINA AUTO LOGISTICS INC's return on equity significantly trails that of both the industry average and the S&P 500.
  • The gross profit margin for CHINA AUTO LOGISTICS INC is currently extremely low, coming in at 0.92%. It has decreased from the same quarter the previous year. Along with this, the net profit margin of -1.62% trails that of the industry average.
  • Net operating cash flow has significantly decreased to -$13.35 million or 621.85% when compared to the same quarter last year. In addition, when comparing to the industry average, the firm's growth rate is much lower.
  • CHINA AUTO LOGISTICS 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. The company has reported a trend of declining earnings per share over the past two years. During the past fiscal year, CHINA AUTO LOGISTICS INC reported lower earnings of $0.16 versus $0.67 in the prior year.

You can view the full analysis from the report here: China Auto Logistics 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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