3 Stocks Improving Performance Of The Services Sector

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 are trading down today with the Dow Jones Industrial Average ( ^DJI) trading down 17.89 points (-0.1%) at 17,537 as of Friday, Nov. 7, 2014, 3:25 PM ET. The NYSE advances/declines ratio sits at 1,893 issues advancing vs. 1,131 declining with 143 unchanged.

The Services sector as a whole was unchanged today versus the S&P 500, which was down 0.1%. Top gainers within the Services sector included General Employment ( JOB), up 9.4%, Radio One ( ROIA), up 4.7%, Dover Motorsports ( DVD), up 4.0%, Cambium Learning Group ( ABCD), up 8.6% and Tiger Media ( IDI), up 2.6%.

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

Cambium Learning Group ( ABCD) is one of the companies that pushed the Services sector higher today. Cambium Learning Group was up $0.13 (8.6%) to $1.64 on heavy volume. Throughout the day, 177,297 shares of Cambium Learning Group exchanged hands as compared to its average daily volume of 19,100 shares. The stock ranged in a price between $1.47-$1.64 after having opened the day at $1.47 as compared to the previous trading day's close of $1.51.

Cambium Learning Group, Inc. operates as an educational solutions and services company in the United States. It operates in four segments: Voyager Sopris Learning (VSL), Learning A-Z, ExploreLearning, and Kurzweil/IntelliTools. Cambium Learning Group has a market cap of $67.8 million and is part of the retail industry. Shares are down 9.0% year-to-date as of the close of trading on Thursday. Currently there are no analysts who rate Cambium Learning Group 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 Cambium Learning Group as a sell. The company's weaknesses can be seen in multiple areas, such as its unimpressive growth in net income and weak operating cash flow.

Highlights from TheStreet Ratings analysis on ABCD 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 Diversified Consumer Services industry. The net income has significantly decreased by 398.8% when compared to the same quarter one year ago, falling from $0.43 million to -$1.29 million.
  • Net operating cash flow has significantly decreased to $0.37 million or 98.65% when compared to the same quarter last year. In addition, when comparing to the industry average, the firm's growth rate is much lower.
  • ABCD, with its decline in revenue, underperformed when compared the industry average of 6.2%. Since the same quarter one year prior, revenues fell by 15.3%. The declining revenue appears to have seeped down to the company's bottom line, decreasing earnings per share.
  • CAMBIUM LEARNING GROUP 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. This company has not demonstrated a clear trend in earnings over the past 2 years, making it difficult to accurately predict earnings for the coming year. During the past fiscal year, CAMBIUM LEARNING GROUP INC continued to lose money by earning -$0.31 versus -$2.72 in the prior year.
  • Compared to where it was a year ago, the stock is now trading at a higher level, and has traded in line with the S&P 500. Turning our attention to the future direction of the stock, we do not believe this stock offers ample reward opportunity to compensate for the risks, despite the fact that it rose over the past year.

You can view the full analysis from the report here: Cambium Learning Group 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 $0.09 (4.0%) to $2.40 on light volume. Throughout the day, 2,421 shares of Dover Motorsports exchanged hands as compared to its average daily volume of 9,300 shares. The stock ranged in a price between $2.40-$2.40 after having opened the day at $2.40 as compared to the previous trading day's close of $2.31.

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 $42.6 million and is part of the retail industry. Shares are down 8.0% year-to-date as of the close of trading on Thursday. Currently there is 1 analyst who rates Dover Motorsports 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 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, good cash flow from operations and expanding profit margins. However, as a counter to these strengths, we also find weaknesses including a generally disappointing performance in the stock itself, deteriorating net income and disappointing return on equity.

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.
  • Net operating cash flow has increased to -$1.42 million or 15.23% when compared to the same quarter last year. In addition, DOVER MOTORSPORTS INC has also vastly surpassed the industry average cash flow growth rate of -74.78%.
  • 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.

Radio One ( ROIA) was another company that pushed the Services sector higher today. Radio One was up $0.11 (4.7%) to $2.45 on heavy volume. Throughout the day, 10,545 shares of Radio One exchanged hands as compared to its average daily volume of 2,600 shares. The stock ranged in a price between $2.33-$2.45 after having opened the day at $2.38 as compared to the previous trading day's close of $2.34.

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 $5.3 million and is part of the retail industry. Shares are down 38.7% year-to-date as of the close of trading on Thursday. Currently there are no analysts who rate Radio One a buy, no analysts rate it a sell, and none rate it a hold.

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.

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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