3 Stocks Pushing The 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 Retail industry as a whole closed the day down 0.9% versus the S&P 500, which was down 0.3%. Laggards within the Retail industry included QKL Stores ( QKLS), down 3.8%, China Nepstar Chain Drugstore ( NPD), down 2.4%, ALCO Stores ( ALCS), down 6.1%, Cache ( CACH), down 5.4% and Gordman's Stores ( GMAN), down 7.6%.

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

Cache ( CACH) is one of the companies that pushed the Retail industry lower today. Cache was down $0.05 (5.4%) to $0.84 on light volume. Throughout the day, 37,308 shares of Cache exchanged hands as compared to its average daily volume of 248,100 shares. The stock ranged in price between $0.84-$0.90 after having opened the day at $0.90 as compared to the previous trading day's close of $0.89.

Cache, Inc., together with its subsidiaries, operates as a mall-based and online woman's specialty retailer of apparel and accessories in the United States. Cache has a market cap of $28.9 million and is part of the services sector. Shares are down 83.6% year-to-date as of the close of trading on Monday. Currently there are 2 analysts who rate Cache a buy, no analysts rate it a sell, and none rate it a hold.

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TheStreet Ratings rates Cache as a sell. The company's weaknesses can be seen in multiple areas, such as its deteriorating net income, disappointing return on equity, poor profit margins, weak operating cash flow and generally disappointing historical performance in the stock itself.

Highlights from TheStreet Ratings analysis on CACH 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 Specialty Retail industry. The net income has significantly decreased by 393.4% when compared to the same quarter one year ago, falling from -$1.61 million to -$7.92 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 Specialty Retail industry and the overall market, CACHE INC's return on equity significantly trails that of both the industry average and the S&P 500.
  • The gross profit margin for CACHE INC is currently lower than what is desirable, coming in at 31.56%. It has decreased from the same quarter the previous year. Along with this, the net profit margin of -14.64% is significantly below that of the industry average.
  • Net operating cash flow has significantly decreased to -$2.23 million or 348.05% when compared to the same quarter last year. In addition, when comparing to the industry average, the firm's growth rate is much lower.
  • Despite any intermediate fluctuations, we have only bad news to report on this stock's performance over the last year: it has tumbled by 86.13%, worse than the S&P 500's performance. Consistent with the plunge in the stock price, the company's earnings per share are down 266.66% compared to the year-earlier 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.

You can view the full analysis from the report here: Cache 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, China Nepstar Chain Drugstore ( NPD) was down $0.05 (2.4%) to $2.07 on light volume. Throughout the day, 24,444 shares of China Nepstar Chain Drugstore exchanged hands as compared to its average daily volume of 47,500 shares. The stock ranged in price between $2.05-$2.12 after having opened the day at $2.10 as compared to the previous trading day's close of $2.12.

China Nepstar Chain Drugstore Ltd., through its subsidiaries, owns and operates a retail drugstore chain in China. China Nepstar Chain Drugstore has a market cap of $214.2 million and is part of the services sector. Shares are up 15.2% year-to-date as of the close of trading on Monday. Currently there are no analysts who rate China Nepstar Chain Drugstore a buy, 1 analyst rates 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 China Nepstar Chain Drugstore as a hold. The company's strengths can be seen in multiple areas, such as its revenue growth, solid stock price performance and largely solid financial position with reasonable debt levels by most measures. However, as a counter to these strengths, we also find weaknesses including feeble growth in the company's earnings per share, deteriorating net income and disappointing return on equity.

Highlights from TheStreet Ratings analysis on NPD go as follows:

  • NPD's revenue growth has slightly outpaced the industry average of 3.1%. Since the same quarter one year prior, revenues slightly increased by 6.3%. 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.
  • Compared to its closing price of one year ago, NPD's share price has jumped by 35.44%, exceeding the performance of the broader market during that same time frame. Regarding the stock's future course, our hold rating indicates that we do not recommend additional investment in this stock despite its gains in the past year.
  • NPD 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. Despite the fact that NPD's debt-to-equity ratio is low, the quick ratio, which is currently 0.65, displays a potential problem in covering short-term cash needs.
  • CHINA NEPSTAR CHAIN DRUG-ADS 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 two years. We anticipate that this should continue in the coming year. During the past fiscal year, CHINA NEPSTAR CHAIN DRUG-ADS reported lower earnings of $0.02 versus $0.14 in the prior year. For the next year, the market is expecting a contraction of 500.0% in earnings (-$0.08 versus $0.02).
  • 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 Food & Staples Retailing industry. The net income has significantly decreased by 302.2% when compared to the same quarter one year ago, falling from -$0.64 million to -$2.56 million.

You can view the full analysis from the report here: China Nepstar Chain Drugstore 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.

QKL Stores ( QKLS) was another company that pushed the Retail industry lower today. QKL Stores was down $0.11 (3.8%) to $2.78 on light volume. Throughout the day, 240 shares of QKL Stores exchanged hands as compared to its average daily volume of 4,400 shares. The stock ranged in price between $2.78-$2.78 after having opened the day at $2.78 as compared to the previous trading day's close of $2.89.

QKL Stores Inc., together with its subsidiaries, operates a supermarket chain in northeastern China and Inner Mongolia. QKL Stores has a market cap of $4.6 million and is part of the services sector. Shares are down 31.2% year-to-date as of the close of trading on Monday.

TheStreet Ratings rates QKL Stores as a sell. The company's weaknesses can be seen in multiple areas, such as its unimpressive growth in net income, generally high debt management risk, poor profit margins, weak operating cash flow and generally disappointing historical performance in the stock itself.

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

Highlights from TheStreet Ratings analysis on QKLS 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 Food & Staples Retailing industry. The net income has significantly decreased by 158.8% when compared to the same quarter one year ago, falling from -$1.45 million to -$3.76 million.
  • The debt-to-equity ratio of 1.30 is relatively high when compared with the industry average, suggesting a need for better debt level management. To add to this, QKLS has a quick ratio of 0.56, this demonstrates the lack of ability of the company to cover short-term liquidity needs.
  • The gross profit margin for QKL STORES INC is rather low; currently it is at 16.82%. It has decreased from the same quarter the previous year. Along with this, the net profit margin of -7.28% is significantly below that of the industry average.
  • Net operating cash flow has significantly decreased to $2.17 million or 58.24% when compared to the same quarter last year. In addition, when comparing the cash generation rate to the industry average, the firm's growth is significantly lower.
  • Despite any intermediate fluctuations, we have only bad news to report on this stock's performance over the last year: it has tumbled by 36.80%, worse than the S&P 500's performance. Consistent with the plunge in the stock price, the company's earnings per share are down 157.29% compared to the year-earlier 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.

You can view the full analysis from the report here: QKL Stores 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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