3 Stocks Pushing The Diversified Services Industry Lower

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.

The Diversified Services industry as a whole was unchanged today versus the S&P 500, which was unchanged. Laggards within the Diversified Services industry included SmartPros ( SPRO), down 3.8%, Bioanalytical Systems ( BASI), down 4.2%, RLJ Entertainment ( RLJE), down 2.8%, Command Security ( MOC), down 2.1% and Lime Energy ( LIME), down 4.5%.

TheStreet Ratings Group would like to highlight 3 stocks that pushed the industry lower today:

Command Security ( MOC) is one of the companies that pushed the Diversified Services industry lower today. Command Security was down $0.04 (2.1%) to $1.90 on light volume. Throughout the day, 5,425 shares of Command Security exchanged hands as compared to its average daily volume of 25,700 shares. The stock ranged in price between $1.82-$2.04 after having opened the day at $1.97 as compared to the previous trading day's close of $1.94.

Command Security Corporation provides uniformed security officers and aviation security services to commercial, financial, industrial, aviation, and governmental customers in the United States. The company operates through Security and Aviation Safeguards divisions. Command Security has a market cap of $18.3 million and is part of the basic materials sector. Shares are down 8.7% year-to-date as of the close of trading on Monday.

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TheStreet Ratings rates Command Security as a hold. The company's strengths can be seen in multiple areas, such as its compelling growth in net income, largely solid financial position with reasonable debt levels by most measures and attractive valuation levels. 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 MOC go as follows:

  • COMMAND SECURITY CORP has shown improvement in its earnings for its most recently reported quarter when compared with the same quarter a year earlier. The company has demonstrated a pattern of positive earnings per share growth over the past two years. During the past fiscal year, COMMAND SECURITY CORP increased its bottom line by earning $0.12 versus $0.04 in the prior year.
  • The net income growth from the same quarter one year ago has significantly exceeded that of the S&P 500 and the Commercial Services & Supplies industry. The net income increased by 1993.9% when compared to the same quarter one year prior, rising from $0.03 million to $0.69 million.
  • MOC, with its decline in revenue, slightly underperformed the industry average of 8.3%. Since the same quarter one year prior, revenues slightly dropped by 0.9%. The declining revenue has not hurt the company's bottom line, with increasing earnings per share.
  • This stock's share value has moved by only 11.74% over the past year. Turning toward the future, the fact that the stock has come down in price over the past year should not necessarily be interpreted as a negative; it could be one of the factors that may help make the stock attractive down the road. Right now, however, we believe that it is too soon to buy.
  • The gross profit margin for COMMAND SECURITY CORP is currently extremely low, coming in at 14.71%. Regardless of MOC's low profit margin, it has managed to increase from the same period last year. Despite the mixed results of the gross profit margin, the net profit margin of 1.83% trails the industry average.

You can view the full analysis from the report here: Command Security Ratings Report

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At the close, RLJ Entertainment ( RLJE) was down $0.10 (2.8%) to $3.50 on light volume. Throughout the day, 1,798 shares of RLJ Entertainment exchanged hands as compared to its average daily volume of 12,600 shares. The stock ranged in price between $3.42-$3.65 after having opened the day at $3.62 as compared to the previous trading day's close of $3.60.

RLJ Entertainment, Inc., an entertainment company, acquires content rights in British episodic mystery and drama, urban programming, and full-length motion pictures. It operates through three segments: Intellectual Property Licensing, Wholesale, and Direct-to-Consumer. RLJ Entertainment has a market cap of $46.8 million and is part of the basic materials sector. Shares are down 26.9% year-to-date as of the close of trading on Monday.

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TheStreet Ratings rates RLJ Entertainment as a sell. The company's weaknesses can be seen in multiple areas, such as its disappointing return on equity, weak operating cash flow, poor profit margins and generally disappointing historical performance in the stock itself.

Highlights from TheStreet Ratings analysis on RLJE go as follows:

  • 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 Media industry and the overall market, RLJ ENTERTAINMENT 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 $0.17 million or 97.99% 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 gross profit margin for RLJ ENTERTAINMENT INC is currently lower than what is desirable, coming in at 30.90%. Despite the low profit margin, it has increased significantly from the same period last year. Despite the mixed results of the gross profit margin, RLJE's net profit margin of -7.10% significantly underperformed when compared to the industry average.
  • RLJE has underperformed the S&P 500 Index, declining 23.17% from its price level of one year ago. 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.
  • RLJ ENTERTAINMENT INC reported significant earnings per share improvement 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, RLJ ENTERTAINMENT INC reported poor results of -$2.30 versus -$0.49 in the prior year.

You can view the full analysis from the report here: RLJ Entertainment Ratings Report

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Bioanalytical Systems ( BASI) was another company that pushed the Diversified Services industry lower today. Bioanalytical Systems was down $0.10 (4.2%) to $2.26 on light volume. Throughout the day, 700 shares of Bioanalytical Systems exchanged hands as compared to its average daily volume of 6,000 shares. The stock ranged in price between $2.25-$2.26 after having opened the day at $2.25 as compared to the previous trading day's close of $2.36.

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 basic materials sector. Shares are down 16.9% year-to-date as of the close of trading on Monday.

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.

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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.

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