3 Stocks Driving The Retail 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 9 points (0.1%) at 17,695 as of Thursday, Nov. 20, 2014, 3:25 PM ET. The NYSE advances/declines ratio sits at 1,959 issues advancing vs. 1,061 declining with 155 unchanged.

The Retail industry as a whole closed the day up 2.4% versus the S&P 500, which was up 0.1%. Top gainers within the Retail industry included Haverty Furniture Companies ( HVT.A), up 2.2%, Appliance Recycling Centers Of America ( ARCI), up 3.6%, Cache ( CACH), up 7.5%, China Nepstar Chain Drugstore ( NPD), up 2.4% and China Jo-Jo Drugstores ( CJJD), up 6.1%.

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

China Nepstar Chain Drugstore ( NPD) is one of the companies that pushed the Retail industry higher today. China Nepstar Chain Drugstore was up $0.04 (2.4%) to $1.74 on average volume. Throughout the day, 48,576 shares of China Nepstar Chain Drugstore exchanged hands as compared to its average daily volume of 47,600 shares. The stock ranged in a price between $1.69-$1.78 after having opened the day at $1.70 as compared to the previous trading day's close of $1.70.

China Nepstar Chain Drugstore Ltd., through its subsidiaries, owns and operates a retail drugstore chain in China. China Nepstar Chain Drugstore has a market cap of $164.8 million and is part of the services sector. Shares are down 7.6% year-to-date as of the close of trading on Wednesday. Currently there are no analysts who rate China Nepstar Chain Drugstore a buy, 1 analyst rates 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 China Nepstar Chain Drugstore 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 expanding profit margins. However, as a counter to these strengths, we also find weaknesses including feeble growth in the company's earnings per share, deteriorating net income and disappointing return on equity.

Highlights from TheStreet Ratings analysis on NPD go as follows:

  • NPD's revenue growth has slightly outpaced the industry average of 0.9%. Since the same quarter one year prior, revenues slightly increased by 6.3%. 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.
  • NPD 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 NPD's debt-to-equity ratio is low, the quick ratio, which is currently 0.65, displays a potential problem in covering short-term cash needs.
  • 42.67% is the gross profit margin for CHINA NEPSTAR CHAIN DRUG-ADS which we consider to be strong. Regardless of NPD's high profit margin, it has managed to decrease from the same period last year. Despite the mixed results of the gross profit margin, the net profit margin of -2.31% trails the industry average.
  • 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 Food & Staples Retailing industry. The net income has significantly decreased by 302.2% when compared to the same quarter one year ago, falling from -$0.64 million to -$2.56 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 Food & Staples Retailing industry and the overall market, CHINA NEPSTAR CHAIN DRUG-ADS'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: China Nepstar Chain Drugstore 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, Cache ( CACH) was up $0.02 (7.5%) to $0.27 on average volume. Throughout the day, 335,533 shares of Cache exchanged hands as compared to its average daily volume of 309,800 shares. The stock ranged in a price between $0.25-$0.30 after having opened the day at $0.25 as compared to the previous trading day's close of $0.25.

Cache, Inc., together with its subsidiaries, operates as a mall-based and online woman's specialty retailer of apparel and accessories in the United States. Cache has a market cap of $8.7 million and is part of the services sector. Shares are down 94.8% year-to-date as of the close of trading on Wednesday. Currently there is 1 analyst who rates Cache 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 Cache as a sell. The company's weaknesses can be seen in multiple areas, such as its deteriorating net income, generally high debt management risk, disappointing return on equity, poor profit margins and generally disappointing historical performance in the stock itself.

Highlights from TheStreet Ratings analysis on CACH 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 Specialty Retail industry. The net income has significantly decreased by 32.3% when compared to the same quarter one year ago, falling from -$9.46 million to -$12.52 million.
  • The debt-to-equity ratio is very high at 6.13 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 0.10, which clearly demonstrates the inability to cover short-term cash needs.
  • 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 Specialty Retail industry and the overall market, CACHE INC's return on equity significantly trails that of both the industry average and the S&P 500.
  • The gross profit margin for CACHE INC is currently lower than what is desirable, coming in at 27.13%. It has decreased from the same quarter the previous year. Along with this, the net profit margin of -27.17% is significantly below that of the industry average.
  • CACH'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 91.76%, 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.

You can view the full analysis from the report here: Cache 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.

Appliance Recycling Centers Of America ( ARCI) was another company that pushed the Retail industry higher today. Appliance Recycling Centers Of America was up $0.10 (3.6%) to $2.86 on light volume. Throughout the day, 6,794 shares of Appliance Recycling Centers Of America exchanged hands as compared to its average daily volume of 14,900 shares. The stock ranged in a price between $2.74-$2.86 after having opened the day at $2.84 as compared to the previous trading day's close of $2.76.

Appliance Recycling Centers of America, Inc., together with its subsidiaries, sells new household appliances through a chain of company-owned retail stores under the ApplianceSmart name. The company operates in two segments, Recycling and Retail. Appliance Recycling Centers Of America has a market cap of $16.1 million and is part of the services sector. Shares are down 3.1% year-to-date as of the close of trading on Wednesday. Currently there are no analysts who rate Appliance Recycling Centers Of America a buy, no analysts rate it a sell, and none rate it a hold.

TheStreet Ratings rates Appliance Recycling Centers Of America as a hold. The company's strengths can be seen in multiple areas, such as its revenue growth, attractive valuation levels and notable return on equity. However, as a counter to these strengths, we also find weaknesses including unimpressive growth in net income, poor profit margins and a generally disappointing performance in the stock itself.

Highlights from TheStreet Ratings analysis on ARCI go as follows:

  • Despite its growing revenue, the company underperformed as compared with the industry average of 1.1%. Since the same quarter one year prior, revenues slightly increased by 0.3%. 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 company's current return on equity greatly increased when compared to its ROE from the same quarter one year prior. This is a signal of significant strength within the corporation. Compared to other companies in the Specialty Retail industry and the overall market on the basis of return on equity, APPLIANCE RECYCLING CTR AMER has underperformed in comparison with the industry average, but has exceeded that of the S&P 500.
  • The gross profit margin for APPLIANCE RECYCLING CTR AMER is currently lower than what is desirable, coming in at 25.85%. It has decreased from the same quarter the previous year. Along with this, the net profit margin of 1.65% trails that of the industry average.
  • 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 51.0% when compared to the same quarter one year ago, falling from $1.13 million to $0.56 million.

You can view the full analysis from the report here: Appliance Recycling Centers Of America 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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