3 Financial Services Stocks Nudging The Industry Higher

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 25.91 points (-0.1%) at 17,627 as of Friday, Nov. 14, 2014, 1:25 PM ET. The NYSE advances/declines ratio sits at 1,592 issues advancing vs. 1,405 declining with 178 unchanged.

The Financial Services industry as a whole was unchanged today versus the S&P 500, which was unchanged. Top gainers within the Financial Services industry included Value Line ( VALU), up 4.0%, Neuberger Berman NY Interm Muni Fund ( NBO), up 2.4%, Central Securities ( CET), up 7.3%, Capitala Finance ( CPTA), up 3.0% and Full Circle Capital ( FULL), up 1.8%.

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

Full Circle Capital ( FULL) is one of the companies that pushed the Financial Services industry higher today. Full Circle Capital was up $0.10 (1.8%) to $5.73 on light volume. Throughout the day, 81,465 shares of Full Circle Capital exchanged hands as compared to its average daily volume of 126,100 shares. The stock ranged in a price between $5.67-$5.80 after having opened the day at $5.79 as compared to the previous trading day's close of $5.63.

Full Circle Capital Corporation is a business development company specializing in debt and equity securities of smaller and lower middle-market companies. Full Circle Capital has a market cap of $67.5 million and is part of the financial sector. Shares are down 19.8% year-to-date as of the close of trading on Thursday. Currently there is 1 analyst who rates Full Circle Capital a buy, no analysts rate it a sell, and 1 rates 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 Full Circle Capital as a sell. The company's weaknesses can be seen in multiple areas, such as its deteriorating net income, disappointing return on equity, weak operating cash flow, generally disappointing historical performance in the stock itself and feeble growth in its earnings per share.

Highlights from TheStreet Ratings analysis on FULL 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 Capital Markets industry. The net income has significantly decreased by 506.1% when compared to the same quarter one year ago, falling from $1.85 million to -$7.53 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 Capital Markets industry and the overall market, FULL CIRCLE CAPITAL CORP'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 -$24.03 million or 3164.53% when compared to the same quarter last year. In addition, when comparing to the industry average, the firm's growth rate is much 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 27.72%, worse than the S&P 500's performance. Consistent with the plunge in the stock price, the company's earnings per share are down 404.16% 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.
  • FULL CIRCLE CAPITAL 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 reported a trend of declining earnings per share over the past two years. However, the consensus estimate suggests that this trend should reverse in the coming year. During the past fiscal year, FULL CIRCLE CAPITAL CORP swung to a loss, reporting -$0.83 versus $0.52 in the prior year. This year, the market expects an improvement in earnings ($0.73 versus -$0.83).

You can view the full analysis from the report here: Full Circle Capital 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, Capitala Finance ( CPTA) was up $0.55 (3.0%) to $18.72 on average volume. Throughout the day, 30,937 shares of Capitala Finance exchanged hands as compared to its average daily volume of 38,400 shares. The stock ranged in a price between $18.07-$18.72 after having opened the day at $18.45 as compared to the previous trading day's close of $18.17.

Capitala Finance has a market cap of $232.6 million and is part of the financial sector. Shares are down 9.9% year-to-date as of the close of trading on Thursday.

STOCKS TO BUY: TheStreet Quant Ratings has identified a handful of stocks that can potentially TRIPLE in the next 12 months. Learn more.

Value Line ( VALU) was another company that pushed the Financial Services industry higher today. Value Line was up $0.60 (4.0%) to $15.70 on light volume. Throughout the day, 479 shares of Value Line exchanged hands as compared to its average daily volume of 4,000 shares. The stock ranged in a price between $14.92-$15.88 after having opened the day at $14.92 as compared to the previous trading day's close of $15.10.

Value Line, Inc. produces and sells investment related periodical publications primarily in the United States. Value Line has a market cap of $155.9 million and is part of the financial sector. Shares are up 30.1% year-to-date as of the close of trading on Thursday. Currently there are no analysts who rate Value Line a buy, no analysts rate it a sell, and none rate it a hold.

TheStreet Ratings rates Value Line as a hold. The company's strengths can be seen in multiple areas, such as its solid stock price performance, compelling growth in net income and revenue growth. However, as a counter to these strengths, we find that the company's profit margins have been poor overall.

Highlights from TheStreet Ratings analysis on VALU go as follows:

  • Powered by its strong earnings growth of 40.00% and other important driving factors, this stock has surged by 68.68% over the past year, outperforming the rise in the S&P 500 Index during the same period. Regarding the stock's future course, our hold rating indicates that we do not recommend additional investment in this stock despite its gains in the past year.
  • The company, on the basis of net income growth from the same quarter one year ago, has significantly outperformed against the S&P 500 and exceeded that of the Media industry average. The net income increased by 40.9% when compared to the same quarter one year prior, rising from $1.45 million to $2.04 million.
  • VALUE LINE INC has improved earnings per share by 40.0% in the most recent quarter compared to the same quarter a year ago. The company has demonstrated a pattern of positive earnings per share growth over the past year. During the past fiscal year, VALUE LINE INC increased its bottom line by earning $0.69 versus $0.67 in the prior year.
  • VALU 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. Despite the fact that VALU's debt-to-equity ratio is low, the quick ratio, which is currently 0.62, displays a potential problem in covering short-term cash needs.
  • The gross profit margin for VALUE LINE INC is rather low; currently it is at 18.39%. Regardless of VALU's low profit margin, it has managed to increase from the same period last year. Despite the mixed results of the gross profit margin, VALU's net profit margin of 22.44% compares favorably to the industry average.

You can view the full analysis from the report here: Value Line 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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