3 Stocks Pushing The Specialty Retail 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 Specialty Retail industry as a whole closed the day down 1.2% versus the S&P 500, which was up 0.2%. Laggards within the Specialty Retail industry included Dover Saddlery ( DOVR), down 2.8%, China Auto Logistics ( CALI), down 7.9%, Lentuo International ( LAS), down 16.4%, Odyssey Marine Exploration ( OMEX), down 1.9% and West Marine ( WMAR), down 5.3%.

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

Lentuo International ( LAS) is one of the companies that pushed the Specialty Retail industry lower today. Lentuo International was down $0.13 (16.4%) to $0.66 on heavy volume. Throughout the day, 523,591 shares of Lentuo International exchanged hands as compared to its average daily volume of 199,800 shares. The stock ranged in price between $0.62-$0.75 after having opened the day at $0.73 as compared to the previous trading day's close of $0.79.

Lentuo International Inc. operates automobile franchise dealerships in the People's Republic of China. Lentuo International has a market cap of $25.7 million and is part of the services sector. Shares are down 9.3% year-to-date as of the close of trading on Friday.

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TheStreet Ratings rates Lentuo International as a hold. The company's strengths can be seen in multiple areas, such as its attractive valuation levels, notable return on equity and increase in net income. However, as a counter to these strengths, we also find weaknesses including generally higher debt management risk, a generally disappointing performance in the stock itself and poor profit margins.

Highlights from TheStreet Ratings analysis on LAS go as follows:

  • LENTUO INTERNATIONAL -ADR reported flat earnings per share in the most recent quarter. 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, LENTUO INTERNATIONAL -ADR turned its bottom line around by earning $0.12 versus -$0.03 in the prior year.
  • LAS, with its decline in revenue, underperformed when compared the industry average of 9.9%. Since the same quarter one year prior, revenues fell by 13.1%. Weakness in the company's revenue seems to not be hurting the bottom line, shown by stable earnings per share.
  • LAS'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 75.48%, which is also worse than the performance of the S&P 500 Index. 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.
  • The debt-to-equity ratio of 1.25 is relatively high when compared with the industry average, suggesting a need for better debt level management. Along with this, the company manages to maintain a quick ratio of 0.26, which clearly demonstrates the inability to cover short-term cash needs.

You can view the full analysis from the report here: Lentuo International Ratings Report

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At the close, China Auto Logistics ( CALI) was down $0.11 (7.9%) to $1.28 on light volume. Throughout the day, 12,720 shares of China Auto Logistics exchanged hands as compared to its average daily volume of 28,000 shares. The stock ranged in price between $1.27-$1.41 after having opened the day at $1.41 as compared to the previous trading day's close of $1.39.

China Auto Logistics Inc. sells and trades in imported automobiles in the People's Republic of China. China Auto Logistics has a market cap of $5.6 million and is part of the services sector. Shares are up 29.9% year-to-date as of the close of trading on Friday.

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TheStreet Ratings rates China Auto Logistics as a sell. The company's weaknesses can be seen in multiple areas, such as its feeble growth in its earnings per share, deteriorating net income, generally high debt management risk, disappointing return on equity and poor profit margins.

Highlights from TheStreet Ratings analysis on CALI go as follows:

  • The debt-to-equity ratio is very high at 4.17 and currently higher than the industry average, implying increased risk associated with the management of debt levels within the company. To add to this, CALI has a quick ratio of 0.64, this demonstrates the lack of ability of the company to cover short-term liquidity 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, CHINA AUTO LOGISTICS INC's return on equity significantly trails that of both the industry average and the S&P 500.
  • The gross profit margin for CHINA AUTO LOGISTICS INC is currently extremely low, coming in at 1.22%. It has decreased from the same quarter the previous year. Along with this, the net profit margin of -1.91% trails that of the industry average.
  • Net operating cash flow has significantly decreased to -$23.88 million or 1049.58% when compared to the same quarter last year. In addition, when comparing to the industry average, the firm's growth rate is much lower.
  • CHINA AUTO LOGISTICS 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. During the past fiscal year, CHINA AUTO LOGISTICS INC reported lower earnings of $0.16 versus $0.67 in the prior year.

You can view the full analysis from the report here: China Auto Logistics 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.

Dover Saddlery ( DOVR) was another company that pushed the Specialty Retail industry lower today. Dover Saddlery was down $0.13 (2.8%) to $4.54 on average volume. Throughout the day, 2,800 shares of Dover Saddlery exchanged hands as compared to its average daily volume of 2,900 shares. The stock ranged in price between $4.43-$4.54 after having opened the day at $4.43 as compared to the previous trading day's close of $4.67.

Dover Saddlery, Inc. operates as a specialty retailer and omni-channel marketer of equestrian products in the United States. The company offers a selection of products required to own, ride, train, and compete with a horse. Dover Saddlery has a market cap of $25.2 million and is part of the services sector. Shares are down 3.7% year-to-date as of the close of trading on Friday.

TheStreet Ratings rates Dover Saddlery as a hold. The company's strengths can be seen in multiple areas, such as its revenue growth, reasonable valuation levels and expanding profit margins. However, as a counter to these strengths, we also find weaknesses including a generally disappointing performance in the stock itself, feeble growth in the company's earnings per share and unimpressive growth in net income.

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Highlights from TheStreet Ratings analysis on DOVR go as follows:

  • Despite its growing revenue, the company underperformed as compared with the industry average of 9.9%. Since the same quarter one year prior, revenues slightly increased by 9.1%. 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.
  • 40.34% is the gross profit margin for DOVER SADDLERY INC which we consider to be strong. It has increased from the same quarter the previous year. Regardless of the strong results of the gross profit margin, the net profit margin of 0.85% trails the industry average.
  • DOVER SADDLERY INC's earnings per share declined by 50.0% in the most recent quarter compared to the same quarter a year ago. The company has suffered a declining pattern earnings per share over the past two years. During the past fiscal year, DOVER SADDLERY INC reported lower earnings of $0.27 versus $0.31 in the prior year.
  • 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 52.6% when compared to the same quarter one year ago, falling from $0.44 million to $0.21 million.

You can view the full analysis from the report here: Dover Saddlery 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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