3 Retail Stocks Pushing Industry Growth

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 15.81 points (-0.1%) at 17,598 as of Tuesday, Nov. 11, 2014, 3:25 PM ET. The NYSE advances/declines ratio sits at 1,371 issues advancing vs. 1,634 declining with 179 unchanged.

The Retail industry as a whole closed the day down 0.4% versus the S&P 500, which was unchanged. Top gainers within the Retail industry included QKL Stores ( QKLS), up 6.4%, China Jo-Jo Drugstores ( CJJD), up 4.4%, Acorn International ( ATV), up 2.1%, U S Auto Parts Network ( PRTS), up 3.3% and bebe stores ( BEBE), up 2.1%.

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

Acorn International ( ATV) is one of the companies that pushed the Retail industry higher today. Acorn International was up $0.05 (2.1%) to $2.40 on light volume. Throughout the day, 10,895 shares of Acorn International exchanged hands as compared to its average daily volume of 44,300 shares. The stock ranged in a price between $2.23-$2.40 after having opened the day at $2.35 as compared to the previous trading day's close of $2.35.

Acorn International, Inc., an integrated multi-platform marketing company, develops, promotes, and sells a portfolio of proprietary-branded products; and third parties products. The company operates two sales platforms, including integrated direct sales and a nationwide distribution network. Acorn International has a market cap of $64.8 million and is part of the services sector. Shares are up 51.5% year-to-date as of the close of trading on Monday. Currently there are no analysts who rate Acorn International a buy, no analysts rate it a sell, and none rate it a hold.

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TheStreet Ratings rates Acorn International 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 and disappointing return on equity.

Highlights from TheStreet Ratings analysis on ATV go as follows:

  • ACORN INTERNATIONAL INC -ADR's earnings per share declined by 50.0% 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, ACORN INTERNATIONAL INC -ADR reported poor results of -$1.45 versus -$0.59 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 Internet & Catalog Retail industry. The net income has significantly decreased by 54.9% when compared to the same quarter one year ago, falling from -$8.70 million to -$13.48 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 Internet & Catalog Retail industry and the overall market, ACORN INTERNATIONAL INC -ADR's return on equity significantly trails that of both the industry average and the S&P 500.
  • 41.43% is the gross profit margin for ACORN INTERNATIONAL INC -ADR which we consider to be strong. Despite the high profit margin, it has decreased significantly from the same period last year. Despite the mixed results of the gross profit margin, ATV's net profit margin of -91.20% significantly underperformed when compared to the industry average.
  • ATV, with its very weak revenue results, has greatly underperformed against the industry average of 12.6%. Since the same quarter one year prior, revenues plummeted by 63.9%. Weakness in the company's revenue seems to have hurt the bottom line, decreasing earnings per share.

You can view the full analysis from the report here: Acorn International 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 Jo-Jo Drugstores ( CJJD) was up $0.08 (4.4%) to $1.94 on light volume. Throughout the day, 30,001 shares of China Jo-Jo Drugstores exchanged hands as compared to its average daily volume of 54,400 shares. The stock ranged in a price between $1.80-$2.15 after having opened the day at $1.80 as compared to the previous trading day's close of $1.86.

China Jo-Jo Drugstores, Inc. operates as a retailer and distributor of pharmaceutical and other healthcare products in the People's Republic of China. China Jo-Jo Drugstores has a market cap of $26.0 million and is part of the services sector. Shares are up 80.2% year-to-date as of the close of trading on Monday. Currently there are no analysts who rate China Jo-Jo Drugstores 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 Jo-Jo Drugstores as a sell. The company's weaknesses can be seen in multiple areas, such as its disappointing return on equity, poor profit margins, weak operating cash flow and generally high debt management risk.

Highlights from TheStreet Ratings analysis on CJJD 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 Food & Staples Retailing industry and the overall market, CHINA JO-JO DRUGSTORES INC's return on equity significantly trails that of both the industry average and the S&P 500.
  • The gross profit margin for CHINA JO-JO DRUGSTORES INC is rather low; currently it is at 18.31%. It has decreased from the same quarter the previous year. Along with this, the net profit margin of -2.10% trails that of the industry average.
  • Net operating cash flow has significantly decreased to -$1.85 million or 152.73% when compared to the same quarter last year. In addition, when comparing to the industry average, the firm's growth rate is much lower.
  • CJJD's debt-to-equity ratio of 0.66 is somewhat low overall, but it is high when compared to the industry average, implying that the management of the debt levels should be evaluated further. Even though the debt-to-equity ratio shows mixed results, the company's quick ratio of 0.46 is very low and demonstrates very weak liquidity.
  • CHINA JO-JO DRUGSTORES INC reported significant earnings per share improvement in the most recent quarter compared to 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, CHINA JO-JO DRUGSTORES INC reported poor results of -$1.81 versus -$1.05 in the prior year.

You can view the full analysis from the report here: China Jo-Jo Drugstores 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 Retail industry higher today. QKL Stores was up $0.15 (6.4%) to $2.49 on light volume. Throughout the day, 954 shares of QKL Stores exchanged hands as compared to its average daily volume of 3,500 shares. The stock ranged in a price between $2.35-$2.49 after having opened the day at $2.35 as compared to the previous trading day's close of $2.34.

QKL Stores Inc., together with its subsidiaries, operates a supermarket chain in northeastern China and Inner Mongolia. QKL Stores has a market cap of $3.4 million and is part of the services sector. Shares are down 46.2% year-to-date as of the close of trading on Monday. 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 32.00%, 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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