3 Stocks Advancing The Retail Industry

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 traded up today with the Dow Jones Industrial Average ( ^DJI) trading up 263 points (1.6%) at 16,380 as of Friday, Oct. 17, 2014, 4:20 PM ET. The NYSE advances/declines ratio sits at 2,043 issues advancing vs. 1,068 declining with 100 unchanged.

The Retail industry as a whole closed the day down 0.6% versus the S&P 500, which was up 1.3%. Top gainers within the Retail industry included Alon Blue Square Israel ( BSI), up 1.7%, Liberty Interactive ( LINTB), up 3.1%, China Nepstar Chain Drugstore ( NPD), up 2.2%, Appliance Recycling Centers Of America ( ARCI), up 2.4% and Acorn International ( ATV), up 6.2%.

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

Appliance Recycling Centers Of America ( ARCI) is one of the companies that pushed the Retail industry higher today. Appliance Recycling Centers Of America was up $0.07 (2.4%) to $2.85 on light volume. Throughout the day, 2,350 shares of Appliance Recycling Centers Of America exchanged hands as compared to its average daily volume of 34,100 shares. The stock ranged in a price between $2.78-$2.86 after having opened the day at $2.86 as compared to the previous trading day's close of $2.78.

Appliance Recycling Centers of America, Inc., together with its subsidiaries, sells new household appliances through a chain of company-owned retail stores under the ApplianceSmart name. The company operates in two segments, Recycling and Retail. Appliance Recycling Centers Of America has a market cap of $15.2 million and is part of the technology sector. Shares are down 3.0% year-to-date as of the close of trading on Thursday. Currently there are no analysts who rate Appliance Recycling Centers Of America 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 Appliance Recycling Centers Of America as a hold. The company's strengths can be seen in multiple areas, such as its revenue growth, attractive valuation levels and good cash flow from operations. However, as a counter to these strengths, we also find weaknesses including unimpressive growth in net income, poor profit margins and a generally disappointing performance in the stock itself.

Highlights from TheStreet Ratings analysis on ARCI go as follows:

  • ARCI's revenue growth has slightly outpaced the industry average of 0.0%. Since the same quarter one year prior, revenues slightly increased by 2.9%. 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.
  • 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 Specialty Retail industry and the overall market on the basis of return on equity, APPLIANCE RECYCLING CTR AMER has underperformed in comparison with the industry average, but has exceeded that of the S&P 500.
  • The gross profit margin for APPLIANCE RECYCLING CTR AMER is currently lower than what is desirable, coming in at 26.64%. It has decreased from the same quarter the previous year. Along with this, the net profit margin of 1.78% trails that of the industry average.
  • 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 decreased by 22.9% when compared to the same quarter one year ago, dropping from $0.77 million to $0.59 million.

You can view the full analysis from the report here: Appliance Recycling Centers Of America 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 up $0.04 (2.2%) to $1.83 on light volume. Throughout the day, 29,145 shares of China Nepstar Chain Drugstore exchanged hands as compared to its average daily volume of 50,500 shares. The stock ranged in a price between $1.78-$1.87 after having opened the day at $1.81 as compared to the previous trading day's close of $1.79.

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 $171.7 million and is part of the technology sector. Shares are down 2.7% year-to-date as of the close of trading on Thursday. 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, largely solid financial position with reasonable debt levels by most measures and increase in stock price during the past year. 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 2.9%. 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.
  • 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.
  • 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.
  • 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 Food & Staples Retailing industry and the overall market, CHINA NEPSTAR CHAIN DRUG-ADS'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: 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.

Liberty Interactive ( LINTB) was another company that pushed the Retail industry higher today. Liberty Interactive was up $0.73 (3.1%) to $24.53 on light volume. Throughout the day, 449 shares of Liberty Interactive exchanged hands as compared to its average daily volume of 800 shares. The stock ranged in a price between $23.76-$25.01 after having opened the day at $25.01 as compared to the previous trading day's close of $23.80.

Liberty Interactive has a market cap of $868.4 million and is part of the technology sector. Shares are down 19.0% year-to-date as of the close of trading on Thursday.

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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