3 Services Stocks Pushing The Sector Higher

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.

One out of the three major indices traded up today The three major indices are trading lower today with the Dow Jones Industrial Average ( ^DJI) trading down 3.66 points (0.0%) at 16,801 as of Thursday, Oct. 2, 2014, 4:20 PM ET. The NYSE advances/declines ratio sits at 1,659 issues advancing vs. 1,437 declining with 130 unchanged.

The Services sector as a whole closed the day up 0.8% versus the S&P 500, which was unchanged. Top gainers within the Services sector included QKL Stores ( QKLS), up 2.4%, Birks Group ( BGI), up 14.8%, Coast Distribution System ( CRV), up 4.7%, Dover Motorsports ( DVD), up 4.4% and China Auto Logistics ( CALI), up 3.3%.

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

China Auto Logistics ( CALI) is one of the companies that pushed the Services sector higher today. China Auto Logistics was up $0.05 (3.3%) to $1.58 on light volume. Throughout the day, 205 shares of China Auto Logistics exchanged hands as compared to its average daily volume of 24,300 shares. The stock ranged in a price between $1.58-$1.58 after having opened the day at $1.58 as compared to the previous trading day's close of $1.53.

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 $6.8 million and is part of the transportation industry. Shares are down 57.0% year-to-date as of the close of trading on Wednesday. Currently there are no analysts who rate China Auto Logistics 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 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.

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.

At the close, Dover Motorsports ( DVD) was up $0.10 (4.4%) to $2.37 on light volume. Throughout the day, 7,070 shares of Dover Motorsports exchanged hands as compared to its average daily volume of 10,300 shares. The stock ranged in a price between $2.29-$2.37 after having opened the day at $2.30 as compared to the previous trading day's close of $2.27.

Dover Motorsports, Inc., through its subsidiaries, markets and promotes motorsports entertainment in the United States. The company promotes events under the auspices of the sanctioning body in motorsports, the National Association for Stock Car Auto Racing. Dover Motorsports has a market cap of $41.8 million and is part of the transportation industry. Shares are down 9.6% year-to-date as of the close of trading on Wednesday. Currently there is 1 analyst who rates Dover Motorsports 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 Dover Motorsports as a hold. The company's strengths can be seen in multiple areas, such as its largely solid financial position with reasonable debt levels by most measures, attractive valuation levels and good cash flow from operations. However, as a counter to these strengths, we also find weaknesses including a generally disappointing performance in the stock itself, disappointing return on equity and deteriorating net income.

Highlights from TheStreet Ratings analysis on DVD go as follows:

  • The current debt-to-equity ratio, 0.33, is low and is below the industry average, implying that there has been successful management of debt levels. Along with the favorable debt-to-equity ratio, the company maintains an adequate quick ratio of 1.13, which illustrates the ability to avoid short-term cash problems.
  • 38.02% is the gross profit margin for DOVER MOTORSPORTS INC which we consider to be strong. Regardless of DVD's high profit margin, it has managed to decrease from the same period last year. Despite the mixed results of the gross profit margin, DVD's net profit margin of 19.95% compares favorably to the industry average.
  • In its most recent trading session, DVD 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. Looking ahead, other than the push or pull of the broad market, we do not see anything in the company's numbers that may help reverse the decline experienced over the past 12 months. Despite the past decline, the stock is still selling for more than most others in its industry.
  • 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 Hotels, Restaurants & Leisure industry and the overall market, DOVER MOTORSPORTS INC's return on equity significantly trails that of both the industry average and the S&P 500.

You can view the full analysis from the report here: Dover Motorsports 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 Services sector higher today. QKL Stores was up $0.07 (2.4%) to $2.97 on light volume. Throughout the day, 1,300 shares of QKL Stores exchanged hands as compared to its average daily volume of 4,500 shares. The stock ranged in a price between $2.70-$2.97 after having opened the day at $2.70 as compared to the previous trading day's close of $2.90.

QKL Stores Inc., together with its subsidiaries, operates a supermarket chain in northeastern China and Inner Mongolia. QKL Stores has a market cap of $4.4 million and is part of the transportation industry. Shares are down 33.8% year-to-date as of the close of trading on Wednesday. Currently there are no analysts who rate QKL Stores a buy, no analysts rate it a sell, and none rate it a hold.

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.

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.

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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