3 Services Stocks Pushing Sector 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.

All three major indices traded up today with the Dow Jones Industrial Average ( ^DJI) trading up 78 points (0.4%) at 17,726 as of Tuesday, Nov. 18, 2014, 3:25 PM ET. The NYSE advances/declines ratio sits at 2,060 issues advancing vs. 970 declining with 148 unchanged.

The Services sector as a whole closed the day up 0.5% versus the S&P 500, which was up 0.7%. Top gainers within the Services sector included Point 360 ( PTSX), up 2.8%, Learning Tree International ( LTRE), up 3.6%, Bioanalytical Systems ( BASI), up 4.3%, Spar Group ( SGRP), up 2.1% and Forward Industries ( FORD), up 2.2%.

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

Spar Group ( SGRP) is one of the companies that pushed the Services sector higher today. Spar Group was up $0.03 (2.1%) to $1.45 on light volume. Throughout the day, 3,300 shares of Spar Group exchanged hands as compared to its average daily volume of 17,300 shares. The stock ranged in a price between $1.44-$1.47 after having opened the day at $1.46 as compared to the previous trading day's close of $1.42.

SPAR Group Inc., together with its subsidiaries, provides merchandising and other marketing services worldwide. Spar Group has a market cap of $30.0 million and is part of the consumer durables industry. Shares are down 28.3% year-to-date as of the close of trading on Monday. Currently there are no analysts who rate Spar Group a buy, no analysts rate it a sell, and none rate it a hold.

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TheStreet Ratings rates Spar Group as a hold. The company's strengths can be seen in multiple areas, such as its revenue growth, largely solid financial position with reasonable debt levels by most measures and notable return on equity. However, as a counter to these strengths, we also find weaknesses including weak operating cash flow, poor profit margins and a generally disappointing performance in the stock itself.

Highlights from TheStreet Ratings analysis on SGRP go as follows:

  • SGRP's revenue growth has slightly outpaced the industry average of 8.9%. Since the same quarter one year prior, revenues rose by 12.8%. This growth in revenue appears to have trickled down to the company's bottom line, improving the earnings per share.
  • The current debt-to-equity ratio, 0.39, is low and is below the industry average, implying that there has been successful management of debt levels. To add to this, SGRP has a quick ratio of 2.18, which demonstrates the ability of the company to cover short-term liquidity needs.
  • SPAR GROUP INC reported significant earnings per share improvement 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, SPAR GROUP INC increased its bottom line by earning $0.15 versus $0.13 in the prior year.
  • The gross profit margin for SPAR GROUP INC is rather low; currently it is at 24.90%. Regardless of SGRP's low profit margin, it has managed to increase from the same period last year. Despite the mixed results of the gross profit margin, SGRP's net profit margin of 1.86% is significantly lower than the industry average.
  • Net operating cash flow has significantly decreased to -$1.92 million or 197.21% when compared to the same quarter last year. In addition, when comparing to the industry average, the firm's growth rate is much lower.

You can view the full analysis from the report here: Spar Group Ratings Report

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At the close, Bioanalytical Systems ( BASI) was up $0.10 (4.3%) to $2.40 on light volume. Throughout the day, 100 shares of Bioanalytical Systems exchanged hands as compared to its average daily volume of 6,100 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 $2.30.

Bioanalytical Systems, Inc. provides drug discovery and development services, and analytical instruments for pharmaceutical, biotechnology, academic, and government organizations in North America, the Pacific Rim, Europe, and internationally. Bioanalytical Systems has a market cap of $19.5 million and is part of the consumer durables industry. Shares are down 10.7% year-to-date as of the close of trading on Monday. Currently there are no analysts who rate Bioanalytical Systems 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 Bioanalytical Systems as a hold. The company's strengths can be seen in multiple areas, such as its solid stock price performance, revenue growth and largely solid financial position with reasonable debt levels by most measures. However, as a counter to these strengths, we also find weaknesses including unimpressive growth in net income and weak operating cash flow.

Highlights from TheStreet Ratings analysis on BASI go as follows:

  • Compared to its closing price of one year ago, BASI's share price has jumped by 37.71%, exceeding the performance of the broader market during that same time frame. 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.
  • BASI's revenue growth trails the industry average of 25.4%. Since the same quarter one year prior, revenues slightly increased by 7.7%. This growth in revenue does not appear to have trickled down to the company's bottom line, displayed by a decline in earnings per share.
  • The debt-to-equity ratio is somewhat low, currently at 0.62, and is less than that of the industry average, implying that there has been a relatively successful effort in the management of debt levels. Even though the company has a strong debt-to-equity ratio, the quick ratio of 0.47 is very weak and demonstrates a lack of ability to pay short-term obligations.
  • 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 62.7% when compared to the same quarter one year ago, falling from $0.58 million to $0.22 million.
  • Net operating cash flow has significantly decreased to $0.21 million or 75.43% when compared to the same quarter last year. In addition, when comparing to the industry average, the firm's growth rate is much lower.

You can view the full analysis from the report here: Bioanalytical Systems 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.

Learning Tree International ( LTRE) was another company that pushed the Services sector higher today. Learning Tree International was up $0.08 (3.6%) to $2.30 on light volume. Throughout the day, 1,915 shares of Learning Tree International exchanged hands as compared to its average daily volume of 3,500 shares. The stock ranged in a price between $2.30-$2.32 after having opened the day at $2.32 as compared to the previous trading day's close of $2.22.

Learning Tree International, Inc., together with its subsidiaries, develops, markets, and delivers a library of instructor-led classroom courses to meet the professional development needs of information technology (IT) professionals and managers worldwide. Learning Tree International has a market cap of $29.4 million and is part of the consumer durables industry. Shares are down 29.3% year-to-date as of the close of trading on Monday. Currently there are no analysts who rate Learning Tree International a buy, no analysts rate it a sell, and none rate it a hold.

TheStreet Ratings rates Learning Tree International as a sell. The company's weaknesses can be seen in multiple areas, such as its unimpressive growth in net income, disappointing return on equity, weak operating cash flow and generally disappointing historical performance in the stock itself.

Highlights from TheStreet Ratings analysis on LTRE 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 154.5% when compared to the same quarter one year ago, falling from -$1.08 million to -$2.75 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 Diversified Consumer Services industry and the overall market, LEARNING TREE INTL 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 -$1.26 million or 178.19% 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 share price of LEARNING TREE INTL INC has not done very well: it is down 13.75% 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.
  • LEARNING TREE INTL 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, LEARNING TREE INTL INC continued to lose money by earning -$0.66 versus -$0.89 in the prior year.

You can view the full analysis from the report here: Learning Tree 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.

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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