3 Stocks Pushing The Specialty Retail Industry Lower

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The Specialty Retail industry as a whole closed the day down 0.1% versus the S&P 500, which was unchanged. Laggards within the Specialty Retail industry included Perfumania Holdings ( PERF), down 2.6%, China Auto Logistics ( CALI), down 6.3%, Trans World Entertainment ( TWMC), down 2.1%, Mecox Lane ( MCOX), down 5.0% and Charles & Colvard ( CTHR), down 4.0%.

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

Mecox Lane ( MCOX) is one of the companies that pushed the Specialty Retail industry lower today. Mecox Lane was down $0.18 (5.0%) to $3.40 on average volume. Throughout the day, 10,403 shares of Mecox Lane exchanged hands as compared to its average daily volume of 11,600 shares. The stock ranged in price between $3.22-$3.50 after having opened the day at $3.50 as compared to the previous trading day's close of $3.58.

Mecox Lane Limited designs and sells health and beauty products through various retail channels in the People's Republic of China. It offers beauty and healthcare products, including skin care, fragrance, cosmetics, and other personal care products. Mecox Lane has a market cap of $44.2 million and is part of the services sector. Shares are down 6.8% year-to-date as of the close of trading on Monday.

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TheStreet Ratings rates Mecox Lane as a sell. The company's weaknesses can be seen in multiple areas, such as its deteriorating net income, disappointing return on equity and generally disappointing historical performance in the stock itself.

Highlights from TheStreet Ratings analysis on MCOX 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 Internet & Catalog Retail industry. The net income has significantly decreased by 96.1% when compared to the same quarter one year ago, falling from -$6.19 million to -$12.13 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, MECOX LANE LTD's return on equity significantly trails that of both the industry average and the S&P 500.
  • The share price of MECOX LANE LTD has not done very well: it is down 22.07% and has underperformed the S&P 500, in part reflecting the company's sharply declining earnings per share when compared to the year-earlier quarter. 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.
  • MECOX LANE LTD's earnings per share declined by 45.5% 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, MECOX LANE LTD continued to lose money by earning -$1.56 versus -$1.95 in the prior year.
  • MCOX 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. Even though the company has a strong debt-to-equity ratio, the quick ratio of 0.42 is very weak and demonstrates a lack of ability to pay short-term obligations.

You can view the full analysis from the report here: Mecox Lane Ratings Report

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At the close, Trans World Entertainment ( TWMC) was down $0.07 (2.1%) to $3.24 on heavy volume. Throughout the day, 195,815 shares of Trans World Entertainment exchanged hands as compared to its average daily volume of 12,300 shares. The stock ranged in price between $3.10-$3.43 after having opened the day at $3.43 as compared to the previous trading day's close of $3.31.

Trans World Entertainment Corporation, together with its subsidiaries, operates as a specialty retailer of entertainment products, including video, music, electronics, trend items, video games, accessories, and related products through its retail stores and e-commerce sites. Trans World Entertainment has a market cap of $103.4 million and is part of the services sector. Shares are down 25.1% year-to-date as of the close of trading on Monday.

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TheStreet Ratings rates Trans World Entertainment 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, feeble growth in the company's earnings per share and deteriorating net income.

Highlights from TheStreet Ratings analysis on TWMC go as follows:

  • TWMC's debt-to-equity ratio is very low at 0.01 and is currently below that of the industry average, implying that there has been very successful management of debt levels.
  • Net operating cash flow has significantly increased by 52.23% to -$4.45 million when compared to the same quarter last year. The firm also exceeded the industry average cash flow growth rate of 20.78%.
  • TWMC, with its decline in revenue, underperformed when compared the industry average of 1.5%. Since the same quarter one year prior, revenues fell by 11.0%. The declining revenue appears to have seeped down to the company's bottom line, decreasing earnings per share.
  • TRANS WORLD ENTMT CORP 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. The company has suffered a declining pattern earnings per share over the past two years. During the past fiscal year, TRANS WORLD ENTMT CORP reported lower earnings of $0.26 versus $1.05 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 100.8% when compared to the same quarter one year ago, falling from -$2.54 million to -$5.10 million.

You can view the full analysis from the report here: Trans World Entertainment Ratings Report

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China Auto Logistics ( CALI) was another company that pushed the Specialty Retail industry lower today. China Auto Logistics was down $0.08 (6.3%) to $1.19 on light volume. Throughout the day, 20,867 shares of China Auto Logistics exchanged hands as compared to its average daily volume of 31,500 shares. The stock ranged in price between $1.15-$1.26 after having opened the day at $1.26 as compared to the previous trading day's close of $1.27.

China Auto Logistics Inc. sells and trades in imported automobiles in the People's Republic of China. China Auto Logistics has a market cap of $5.4 million and is part of the services sector. Shares are down 62.1% year-to-date as of the close of trading on Monday.

TheStreet Ratings rates China Auto Logistics 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, generally high debt management risk, disappointing return on equity and poor profit margins.

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Highlights from TheStreet Ratings analysis on CALI go as follows:

  • The debt-to-equity ratio is very high at 3.51 and currently higher than the industry average, implying increased risk associated with the management of debt levels within the company. Along with the unfavorable debt-to-equity ratio, CALI maintains a poor quick ratio of 0.72, which illustrates the inability to avoid short-term cash problems.
  • 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 Specialty Retail industry and the overall market, CHINA AUTO LOGISTICS INC's return on equity significantly trails that of both the industry average and the S&P 500.
  • The gross profit margin for CHINA AUTO LOGISTICS INC is currently extremely low, coming in at 0.92%. It has decreased from the same quarter the previous year. Along with this, the net profit margin of -1.62% trails that of the industry average.
  • Net operating cash flow has significantly decreased to -$13.35 million or 621.85% when compared to the same quarter last year. In addition, when comparing to the industry average, the firm's growth rate is much lower.
  • CHINA AUTO LOGISTICS 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. The company has reported a trend of declining earnings per share over the past two years. During the past fiscal year, CHINA AUTO LOGISTICS INC reported lower earnings of $0.16 versus $0.67 in the prior year.

You can view the full analysis from the report here: China Auto Logistics 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.

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