3 Stocks Pushing The Diversified Services Industry Lower

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The Diversified Services industry as a whole closed the day down 0.9% versus the S&P 500, which was unchanged. Laggards within the Diversified Services industry included VirtualScopics ( VSCP), down 3.7%, SmartPros ( SPRO), down 2.1%, Cambium Learning Group ( ABCD), down 2.5%, EnviroStar ( EVI), down 2.1% and RLJ Entertainment ( RLJE), down 2.2%.

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

RLJ Entertainment ( RLJE) is one of the companies that pushed the Diversified Services industry lower today. RLJ Entertainment was down $0.09 (2.2%) to $3.90 on light volume. Throughout the day, 2,729 shares of RLJ Entertainment exchanged hands as compared to its average daily volume of 12,400 shares. The stock ranged in price between $3.78-$4.02 after having opened the day at $4.02 as compared to the previous trading day's close of $3.99.

RLJ Entertainment, Inc., an entertainment company, acquires content rights in British episodic mystery and drama, urban programming, and full-length motion pictures. It operates through three segments: Intellectual Property Licensing, Wholesale, and Direct-to-Consumer. RLJ Entertainment has a market cap of $52.2 million and is part of the services sector. Shares are down 18.4% year-to-date as of the close of trading on Wednesday.

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TheStreet Ratings rates RLJ Entertainment as a sell. The company's weaknesses can be seen in multiple areas, such as its disappointing return on equity, weak operating cash flow, poor profit margins and generally disappointing historical performance in the stock itself.

Highlights from TheStreet Ratings analysis on RLJE 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, RLJ ENTERTAINMENT INC's return on equity significantly trails that of both the industry average and the S&P 500.
  • Net operating cash flow has significantly decreased to $0.17 million or 97.99% when compared to the same quarter last year. In addition, when comparing to the industry average, the firm's growth rate is much lower.
  • The gross profit margin for RLJ ENTERTAINMENT INC is currently lower than what is desirable, coming in at 30.90%. Despite the low profit margin, it has increased significantly from the same period last year. Despite the mixed results of the gross profit margin, RLJE's net profit margin of -7.10% significantly underperformed when compared to the industry average.
  • RLJE has underperformed the S&P 500 Index, declining 23.78% 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.
  • RLJ ENTERTAINMENT 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, RLJ ENTERTAINMENT INC reported poor results of -$2.30 versus -$0.49 in the prior year.

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

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At the close, Cambium Learning Group ( ABCD) was down $0.04 (2.5%) to $1.76 on heavy volume. Throughout the day, 52,941 shares of Cambium Learning Group exchanged hands as compared to its average daily volume of 23,300 shares. The stock ranged in price between $1.76-$1.96 after having opened the day at $1.85 as compared to the previous trading day's close of $1.81.

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 $83.1 million and is part of the services sector. Shares are up 11.4% year-to-date as of the close of trading on Wednesday.

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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. Despite a decrease in cash flow CAMBIUM LEARNING GROUP INC is still fairing well by exceeding its industry average cash flow growth rate of -110.62%.
  • ABCD, with its decline in revenue, underperformed when compared the industry average of 4.1%. 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

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VirtualScopics ( VSCP) was another company that pushed the Diversified Services industry lower today. VirtualScopics was down $0.15 (3.7%) to $3.95 on heavy volume. Throughout the day, 5,805 shares of VirtualScopics exchanged hands as compared to its average daily volume of 3,600 shares. The stock ranged in price between $3.95-$4.11 after having opened the day at $4.11 as compared to the previous trading day's close of $4.10.

VirtualScopics, Inc. provides imaging solutions for the pharmaceutical, biotechnology, and medical device industries. VirtualScopics has a market cap of $12.3 million and is part of the services sector. Shares are up 18.5% year-to-date as of the close of trading on Wednesday. Currently there is 1 analyst who rates VirtualScopics a buy, no analysts rate it a sell, and none rate it a hold.

TheStreet Ratings rates VirtualScopics as a sell. The company's weaknesses can be seen in multiple areas, such as its deteriorating net income, disappointing return on equity and weak operating cash flow.

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Highlights from TheStreet Ratings analysis on VSCP 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 Life Sciences Tools & Services industry. The net income has significantly decreased by 646.3% when compared to the same quarter one year ago, falling from $0.13 million to -$0.73 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 Life Sciences Tools & Services industry and the overall market, VIRTUALSCOPICS INC's return on equity significantly trails that of both the industry average and the S&P 500.
  • Net operating cash flow has significantly decreased to -$1.16 million or 716.90% when compared to the same quarter last year. In addition, when comparing to the industry average, the firm's growth rate is much lower.
  • 35.46% is the gross profit margin for VIRTUALSCOPICS INC 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, VSCP's net profit margin of -27.64% significantly underperformed when compared to the industry average.
  • The revenue fell significantly faster than the industry average of 24.7%. Since the same quarter one year prior, revenues fell by 28.5%. 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: VirtualScopics Ratings Report

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