3 Stocks Pushing The Services Sector 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 Services sector as a whole was unchanged today versus the S&P 500, which was up 0.5%. Laggards within the Services sector included Point 360 ( PTSX), down 8.6%, China Metro-Rural Holdings ( CNR), down 3.3%, Radio One ( ROIA), down 3.7%, Taitron Components ( TAIT), down 18.9% and QKL Stores ( QKLS), down 5.2%.

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

QKL Stores ( QKLS) is one of the companies that pushed the Services sector lower today. QKL Stores was down $0.15 (5.2%) to $2.72 on light volume. Throughout the day, 200 shares of QKL Stores exchanged hands as compared to its average daily volume of 3,200 shares. The stock ranged in price between $2.72-$2.72 after having opened the day at $2.72 as compared to the previous trading day's close of $2.87.

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 diversified services industry. Shares are down 31.7% year-to-date as of the close of trading on Tuesday.

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 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 41.05%, 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.

At the close, Radio One ( ROIA) was down $0.09 (3.7%) to $2.33 on heavy volume. Throughout the day, 9,254 shares of Radio One exchanged hands as compared to its average daily volume of 2,500 shares. The stock ranged in price between $2.24-$2.35 after having opened the day at $2.30 as compared to the previous trading day's close of $2.42.

Radio One, Inc., together with its subsidiaries, operates as an urban-oriented multi-media company in the United States. The company operates through four segments: Radio Broadcasting, Reach Media, Internet, and Cable Television. Radio One has a market cap of $5.5 million and is part of the diversified services industry. Shares are down 36.3% year-to-date as of the close of trading on Tuesday.

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 Radio One as a sell. The company's weaknesses can be seen in multiple areas, such as its disappointing return on equity, generally disappointing historical performance in the stock itself and generally high debt management risk.

Highlights from TheStreet Ratings analysis on ROIA go as follows:

  • 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 Media industry and the overall market, RADIO ONE INC's return on equity significantly trails that of both the industry average and the S&P 500.
  • The debt-to-equity ratio is very high at 19.00 and currently higher than the industry average, implying increased risk associated with the management of debt levels within the company. Despite the company's weak debt-to-equity ratio, the company has managed to keep a very strong quick ratio of 2.63, which shows the ability to cover short-term cash needs.
  • ROIA has underperformed the S&P 500 Index, declining 21.46% from its price level of one year ago. 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.
  • The company, on the basis of net income growth from the same quarter one year ago, has significantly underperformed compared to the Media industry average, but is greater than that of the S&P 500. The net income increased by 23.9% when compared to the same quarter one year prior, going from -$14.21 million to -$10.82 million.
  • ROIA, with its decline in revenue, underperformed when compared the industry average of 8.3%. Since the same quarter one year prior, revenues slightly dropped by 9.3%. The declining revenue has not hurt the company's bottom line, with increasing earnings per share.

You can view the full analysis from the report here: Radio One 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 Metro-Rural Holdings ( CNR) was another company that pushed the Services sector lower today. China Metro-Rural Holdings was down $0.03 (3.3%) to $0.89 on light volume. Throughout the day, 2,275 shares of China Metro-Rural Holdings exchanged hands as compared to its average daily volume of 5,900 shares. The stock ranged in price between $0.89-$0.92 after having opened the day at $0.92 as compared to the previous trading day's close of $0.92.

China Metro-Rural Holdings has a market cap of $67.7 million and is part of the diversified services industry. Shares are up 2.2% year-to-date as of the close of trading on Tuesday. Currently there is 1 analyst who rates China Metro-Rural Holdings 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.

More from Markets

Amazon Profit Blast Puts Shares on Record Path, Challenging Apple as World's Bi

Amazon Profit Blast Puts Shares on Record Path, Challenging Apple as World's Bi

UK GDP Hits Slowest Pace in Five Years as Cold Snap Hammers Construction

UK GDP Hits Slowest Pace in Five Years as Cold Snap Hammers Construction

Global Stocks Rise on Tech Resurgence; Dollar Past 3-Month High Ahead of Q1 GDP

Global Stocks Rise on Tech Resurgence; Dollar Past 3-Month High Ahead of Q1 GDP

Daimler Shares Rise After Record Mercedes-Benz Sales, Bullish Profit Outlook

Daimler Shares Rise After Record Mercedes-Benz Sales, Bullish Profit Outlook

AMD Rises Above the Competition; Loan Losses Mount for Big Banks -- ICYMI

AMD Rises Above the Competition; Loan Losses Mount for Big Banks -- ICYMI