3 Stocks Advancing The Specialty 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.

Two 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 up 80 points (0.5%) at 17,464 as of Wednesday, Nov. 5, 2014, 3:25 PM ET. The NYSE advances/declines ratio sits at 1,610 issues advancing vs. 1,406 declining with 158 unchanged.

The Specialty Retail industry as a whole closed the day up 0.9% versus the S&P 500, which was up 0.5%. Top gainers within the Specialty Retail industry included Birks Group ( BGI), up 6.0%, Dover Saddlery ( DOVR), up 2.0%, PCM ( PCMI), up 2.4%, Rush ( RUSHB), up 2.4% and Lentuo International ( LAS), up 4.7%.

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

Rush ( RUSHB) is one of the companies that pushed the Specialty Retail industry higher today. Rush was up $0.74 (2.4%) to $31.74 on heavy volume. Throughout the day, 9,692 shares of Rush exchanged hands as compared to its average daily volume of 6,200 shares. The stock ranged in a price between $31.49-$31.92 after having opened the day at $31.71 as compared to the previous trading day's close of $31.00.

Rush Enterprises, Inc., through its subsidiaries, operates as an integrated retailer of commercial vehicles and related services in the United States. The company owns and operates a network of commercial vehicle dealerships under the Rush Truck Centers name. Rush has a market cap of $322.3 million and is part of the services sector. Shares are up 21.6% year-to-date as of the close of trading on Tuesday. Currently there are no analysts who rate Rush a buy, no analysts rate it a sell, and none rate it a hold.

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TheStreet Ratings rates Rush as a hold. The company's strengths can be seen in multiple areas, such as its robust revenue growth, solid stock price performance and compelling growth in net income. However, as a counter to these strengths, we also find weaknesses including generally higher debt management risk and poor profit margins.

Highlights from TheStreet Ratings analysis on RUSHB go as follows:

  • The revenue growth greatly exceeded the industry average of 3.5%. Since the same quarter one year prior, revenues rose by 35.9%. Growth in the company's revenue appears to have helped boost the earnings per share.
  • Powered by its strong earnings growth of 54.05% and other important driving factors, this stock has surged by 27.44% over the past year, outperforming the rise in the S&P 500 Index during the same period. 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.
  • RUSH ENTERPRISES INC reported significant earnings per share improvement 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, RUSH ENTERPRISES INC reported lower earnings of $1.22 versus $1.58 in the prior year. This year, the market expects an improvement in earnings ($1.90 versus $1.22).
  • The gross profit margin for RUSH ENTERPRISES INC is rather low; currently it is at 16.01%. It has decreased from the same quarter the previous year. Along with this, the net profit margin of 1.89% trails that of the industry average.
  • Currently the debt-to-equity ratio of 1.78 is quite high overall and when compared to the industry average, suggesting that the current management of debt levels should be re-evaluated. Along with this, the company manages to maintain a quick ratio of 0.27, which clearly demonstrates the inability to cover short-term cash needs.

You can view the full analysis from the report here: Rush 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, PCM ( PCMI) was up $0.24 (2.4%) to $10.11 on average volume. Throughout the day, 11,272 shares of PCM exchanged hands as compared to its average daily volume of 13,000 shares. The stock ranged in a price between $9.82-$10.12 after having opened the day at $9.87 as compared to the previous trading day's close of $9.87.

PCM, Inc. operates as a multi-vendor provider of technology products, services, and solutions to commercial businesses; state, local, and federal governments; and educational institutions and individual consumers primarily in the United States. PCM has a market cap of $121.7 million and is part of the services sector. Shares are down 4.3% year-to-date as of the close of trading on Tuesday. Currently there are no analysts who rate PCM 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 PCM as a hold. The company's strengths can be seen in multiple areas, such as its reasonable valuation levels, good cash flow from operations and largely solid financial position with reasonable debt levels by most measures. However, as a counter to these strengths, we also find weaknesses including deteriorating net income, disappointing return on equity and a generally disappointing performance in the stock itself.

Highlights from TheStreet Ratings analysis on PCMI go as follows:

  • Net operating cash flow has significantly increased by 294.16% to $43.62 million when compared to the same quarter last year. In addition, PCM INC has also vastly surpassed the industry average cash flow growth rate of 5.76%.
  • PCMI, with its decline in revenue, slightly underperformed the industry average of 1.8%. Since the same quarter one year prior, revenues slightly dropped by 4.5%. Weakness in the company's revenue seems to have hurt the bottom line, decreasing earnings per share.
  • 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 Electronic Equipment, Instruments & Components industry. The net income has significantly decreased by 63.8% when compared to the same quarter one year ago, falling from $3.16 million to $1.15 million.
  • 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. When compared to other companies in the Electronic Equipment, Instruments & Components industry and the overall market, PCM INC's return on equity is below that of both the industry average and the S&P 500.

You can view the full analysis from the report here: PCM 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.

Dover Saddlery ( DOVR) was another company that pushed the Specialty Retail industry higher today. Dover Saddlery was up $0.10 (2.0%) to $5.00 on light volume. Throughout the day, 2,606 shares of Dover Saddlery exchanged hands as compared to its average daily volume of 6,400 shares. The stock ranged in a price between $5.00-$5.00 after having opened the day at $5.00 as compared to the previous trading day's close of $4.90.

Dover Saddlery, Inc. operates as a specialty retailer and omni-channel marketer of equestrian products in the United States. The company offers a selection of products required to own, ride, train, and compete with a horse. Dover Saddlery has a market cap of $26.3 million and is part of the services sector. Shares are down 8.4% year-to-date as of the close of trading on Tuesday. Currently there are no analysts who rate Dover Saddlery a buy, no analysts rate it a sell, and none rate it a hold.

TheStreet Ratings rates Dover Saddlery as a hold. The company's strengths can be seen in multiple areas, such as its revenue growth, reasonable valuation levels and good cash flow from operations. However, as a counter to these strengths, we also find weaknesses including feeble growth in the company's earnings per share, unimpressive growth in net income and generally higher debt management risk.

Highlights from TheStreet Ratings analysis on DOVR go as follows:

  • DOVR's revenue growth has slightly outpaced the industry average of 1.5%. Since the same quarter one year prior, revenues slightly increased by 6.2%. 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.
  • 39.96% is the gross profit margin for DOVER SADDLERY INC which we consider to be strong. It has increased from the same quarter the previous year. Regardless of the strong results of the gross profit margin, the net profit margin of 1.07% trails the industry average.
  • DOVER SADDLERY INC's earnings per share declined by 16.7% in the most recent quarter compared to 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, DOVER SADDLERY INC reported lower earnings of $0.27 versus $0.31 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 Specialty Retail industry. The net income has significantly decreased by 26.2% when compared to the same quarter one year ago, falling from $0.36 million to $0.26 million.

You can view the full analysis from the report here: Dover Saddlery 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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