3 Specialty Retail Stocks Driving 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.

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 Specialty Retail industry as a whole closed the day up 0.1% versus the S&P 500, which was up 0.7%. Top gainers within the Specialty Retail industry included Mecox Lane ( MCOX), up 8.4%, Odyssey Marine Exploration ( OMEX), up 3.6%, Titan Machinery ( TITN), up 4.7% and Container Store Group ( TCS), up 2.1%.

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

Titan Machinery ( TITN) is one of the companies that pushed the Specialty Retail industry higher today. Titan Machinery was up $0.65 (4.7%) to $14.49 on light volume. Throughout the day, 155,381 shares of Titan Machinery exchanged hands as compared to its average daily volume of 210,700 shares. The stock ranged in a price between $13.90-$14.72 after having opened the day at $13.90 as compared to the previous trading day's close of $13.84.

Titan Machinery Inc. owns and operates a network of full service agricultural and construction equipment stores in the United States and Europe. The company operates through three segments: Agriculture, Construction, and International. Titan Machinery has a market cap of $295.9 million and is part of the services sector. Shares are down 22.3% year-to-date as of the close of trading on Monday. Currently there are 2 analysts who rate Titan Machinery a buy, 1 analyst rates it a sell, and 3 rate it a hold.

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TheStreet Ratings rates Titan Machinery as a hold. Among the primary strengths of the company is its generally strong cash flow from operations. At the same time, however, we also find weaknesses including deteriorating net income, generally higher debt management risk and disappointing return on equity.

Highlights from TheStreet Ratings analysis on TITN go as follows:

  • Net operating cash flow has increased to -$24.81 million or 41.16% when compared to the same quarter last year. The firm also exceeded the industry average cash flow growth rate of 14.16%.
  • TITN, with its decline in revenue, underperformed when compared the industry average of 6.0%. Since the same quarter one year prior, revenues slightly dropped by 7.6%. Weakness in the company's revenue seems to have hurt the bottom line, decreasing earnings per share.
  • TITAN MACHINERY 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. However, the consensus estimate suggests that this trend should reverse in the coming year. During the past fiscal year, TITAN MACHINERY INC reported lower earnings of $0.41 versus $2.00 in the prior year. This year, the market expects an improvement in earnings ($0.43 versus $0.41).
  • The debt-to-equity ratio is very high at 2.69 and currently higher than the industry average, implying increased risk associated with the management of debt levels within the company. Along with this, the company manages to maintain a quick ratio of 0.18, which clearly demonstrates the inability to cover short-term cash needs.
  • 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 Trading Companies & Distributors industry and the overall market, TITAN MACHINERY INC's return on equity significantly trails that of both the industry average and the S&P 500.

You can view the full analysis from the report here: Titan Machinery 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, Odyssey Marine Exploration ( OMEX) was up $0.04 (3.6%) to $1.16 on light volume. Throughout the day, 135,742 shares of Odyssey Marine Exploration exchanged hands as compared to its average daily volume of 428,000 shares. The stock ranged in a price between $1.13-$1.19 after having opened the day at $1.13 as compared to the previous trading day's close of $1.12.

Odyssey Marine Exploration, Inc., together with its subsidiaries, is engaged in the archaeologically sensitive exploration and recovery of deep-ocean shipwrecks worldwide. Odyssey Marine Exploration has a market cap of $95.6 million and is part of the services sector. Shares are down 44.5% year-to-date as of the close of trading on Monday. Currently there are 2 analysts who rate Odyssey Marine Exploration 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 Odyssey Marine Exploration as a sell. The company's weaknesses can be seen in multiple areas, such as its generally high debt management risk and generally disappointing historical performance in the stock itself.

Highlights from TheStreet Ratings analysis on OMEX go as follows:

  • Currently the debt-to-equity ratio of 1.88 is quite high overall and when compared to the industry average, suggesting that the current management of debt levels should be re-evaluated. To add to this, OMEX has a quick ratio of 0.58, this demonstrates the lack of ability of the company to cover short-term liquidity needs.
  • OMEX's stock share price has done very poorly compared to where it was a year ago: Despite any rallies, the net result is that it is down by 45.80%, which is also worse that the performance of the S&P 500 Index. Investors have so far failed to pay much attention to the earnings improvements the company has managed to achieve over the last 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.
  • ODYSSEY MARINE EXPLORATION 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 two years. However, we anticipate underperformance relative to this pattern in the coming year. During the past fiscal year, ODYSSEY MARINE EXPLORATION continued to lose money by earning -$0.14 versus -$0.25 in the prior year. For the next year, the market is expecting a contraction of 85.7% in earnings (-$0.26 versus -$0.14).
  • Compared to other companies in the Professional Services industry and the overall market, ODYSSEY MARINE EXPLORATION's return on equity significantly trails that of both the industry average and the S&P 500.
  • Net operating cash flow has increased to -$6.27 million or 39.30% when compared to the same quarter last year. The firm also exceeded the industry average cash flow growth rate of 25.19%.

You can view the full analysis from the report here: Odyssey Marine Exploration 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.

Mecox Lane ( MCOX) was another company that pushed the Specialty Retail industry higher today. Mecox Lane was up $0.26 (8.4%) to $3.36 on light volume. Throughout the day, 5,010 shares of Mecox Lane exchanged hands as compared to its average daily volume of 11,600 shares. The stock ranged in a price between $3.15-$3.36 after having opened the day at $3.15 as compared to the previous trading day's close of $3.10.

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 $40.3 million and is part of the services sector. Shares are down 15.1% year-to-date as of the close of trading on Monday. Currently there are no analysts who rate Mecox Lane a buy, no analysts rate it a sell, and none rate it a hold.

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 24.08% 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

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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