3 Diversified Services Stocks Pushing Industry 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.

Two out of the three major indices traded up today 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 9.47 points (-0.1%) at 17,801 as of Monday, Nov. 24, 2014, 3:25 PM ET. The NYSE advances/declines ratio sits at 1,732 issues advancing vs. 1,284 declining with 172 unchanged.

The Diversified Services industry as a whole closed the day up 0.8% versus the S&P 500, which was up 0.2%. Top gainers within the Diversified Services industry included Learning Tree International ( LTRE), up 9.7%, Bioanalytical Systems ( BASI), up 4.9%, VirtualScopics ( VSCP), up 5.5%, DLH Holdings ( DLHC), up 2.6% and Ambassadors Group ( EPAX), up 2.5%.

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

VirtualScopics ( VSCP) is one of the companies that pushed the Diversified Services industry higher today. VirtualScopics was up $0.20 (5.5%) to $3.86 on light volume. Throughout the day, 990 shares of VirtualScopics exchanged hands as compared to its average daily volume of 3,900 shares. The stock ranged in a price between $3.59-$3.86 after having opened the day at $3.59 as compared to the previous trading day's close of $3.66.

VirtualScopics, Inc. provides imaging solutions for the pharmaceutical, biotechnology, and medical device industries. VirtualScopics has a market cap of $11.7 million and is part of the services sector. Shares are up 13.3% year-to-date as of the close of trading on Friday. Currently there is 1 analyst who rates VirtualScopics a buy, no analysts rate it a sell, and none rate it a hold.

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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.

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 25.4%. 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

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, Bioanalytical Systems ( BASI) was up $0.11 (4.9%) to $2.36 on heavy volume. Throughout the day, 16,562 shares of Bioanalytical Systems exchanged hands as compared to its average daily volume of 6,000 shares. The stock ranged in a price between $2.25-$2.45 after having opened the day at $2.25 as compared to the previous trading day's close of $2.25.

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 $18.2 million and is part of the services sector. Shares are down 16.9% year-to-date as of the close of trading on Friday. Currently there are no analysts who rate Bioanalytical Systems a buy, no analysts rate it a sell, and none rate it a hold.

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TheStreet Ratings rates Bioanalytical Systems 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 solid stock price performance. 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:

  • 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 Diversified Services industry higher today. Learning Tree International was up $0.22 (9.7%) to $2.50 on light volume. Throughout the day, 1,000 shares of Learning Tree International exchanged hands as compared to its average daily volume of 3,200 shares. The stock ranged in a price between $2.47-$2.50 after having opened the day at $2.50 as compared to the previous trading day's close of $2.28.

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 $30.0 million and is part of the services sector. Shares are down 27.7% year-to-date as of the close of trading on Friday. 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 17.46% 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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