3 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 260 points (1.5%) at 17,814 as of Thursday, Jan. 22, 2015, 4:20 PM ET. The NYSE advances/declines ratio sits at 2,444 issues advancing vs. 659 declining with 120 unchanged.

The Retail industry as a whole closed the day up 1.3% versus the S&P 500, which was up 1.5%. Top gainers within the Retail industry included Liberty Interactive ( LINTB), up 2.4%, Wet Seal ( WTSL), up 2.9%, Liberator Medical Holdings ( LBMH), up 1.6%, New York & Company ( NWY), up 5.3% and Village Super Market ( VLGEA), up 3.4%.

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

Liberator Medical Holdings ( LBMH) is one of the companies that pushed the Retail industry higher today. Liberator Medical Holdings was up $0.05 (1.6%) to $3.10 on average volume. Throughout the day, 143,790 shares of Liberator Medical Holdings exchanged hands as compared to its average daily volume of 105,800 shares. The stock ranged in a price between $2.98-$3.10 after having opened the day at $3.07 as compared to the previous trading day's close of $3.05.

Liberator Medical Holdings, Inc., together with its subsidiaries, distributes direct-to-consumer durable medical supplies for seniors and others with chronic illness in the United States. Liberator Medical Holdings has a market cap of $162.7 million and is part of the services sector. Shares are up 5.2% year-to-date as of the close of trading on Wednesday. Currently there is 1 analyst who rates Liberator Medical Holdings a buy, no analysts rate it a sell, and none rate it a hold.

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TheStreet Ratings rates Liberator Medical Holdings as a buy. 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, notable return on equity and expanding profit margins. We feel these strengths outweigh the fact that the company has had sub par growth in net income.

Highlights from TheStreet Ratings analysis on LBMH go as follows:

  • The revenue growth came in higher than the industry average of 1.2%. Since the same quarter one year prior, revenues rose by 13.8%. This growth in revenue does not appear to have trickled down to the company's bottom line, displaying stagnant earnings per share.
  • LBMH's debt-to-equity ratio is very low at 0.06 and is currently below that of the industry average, implying that there has been very successful management of debt levels. To add to this, LBMH has a quick ratio of 2.13, which demonstrates the ability of the company to cover short-term liquidity needs.
  • The return on equity has improved slightly when compared to the same quarter one year prior. This can be construed as a modest strength in the organization. Compared to other companies in the Food & Staples Retailing industry and the overall market, LIBERATOR MEDICAL HLDGS INC's return on equity exceeds that of both the industry average and the S&P 500.
  • LIBERATOR MEDICAL HLDGS INC reported flat earnings per share in the most recent quarter. Stable earnings per share over the past year indicate the company has sound management over its earnings and share float. We anticipate these figures will begin to experience more growth in the coming year. During the past fiscal year, LIBERATOR MEDICAL HLDGS INC increased its bottom line by earning $0.15 versus $0.14 in the prior year. This year, the market expects an improvement in earnings ($0.21 versus $0.15).
  • The gross profit margin for LIBERATOR MEDICAL HLDGS INC is rather high; currently it is at 62.06%. Regardless of LBMH's high profit margin, it has managed to decrease from the same period last year. Despite the mixed results of the gross profit margin, LBMH's net profit margin of 10.57% compares favorably to the industry average.

You can view the full analysis from the report here: Liberator Medical Holdings Ratings Report

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At the close, Wet Seal ( WTSL) was up $0.00 (2.9%) to $0.04 on average volume. Throughout the day, 6,017,142 shares of Wet Seal exchanged hands as compared to its average daily volume of 4,251,500 shares. The stock ranged in a price between $0.03-$0.04 after having opened the day at $0.04 as compared to the previous trading day's close of $0.04.

The Wet Seal, Inc., a multi-channel specialty retailer, operates stores that sell fashionable and contemporary apparel and accessory items for female consumers. It operates in two segments, Wet Seal and Arden B. Wet Seal has a market cap of $2.8 million and is part of the services sector. Shares are down 45.9% year-to-date as of the close of trading on Wednesday. Currently there are no analysts who rate Wet Seal a buy, no analysts rate it a sell, and none rate it a hold.

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TheStreet Ratings rates Wet Seal as a sell. The company's weaknesses can be seen in multiple areas, such as its deteriorating net income, poor profit margins, weak operating cash flow, generally disappointing historical performance in the stock itself and feeble growth in its earnings per share.

Highlights from TheStreet Ratings analysis on WTSL 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 141.1% when compared to the same quarter one year ago, falling from -$14.91 million to -$35.94 million.
  • The gross profit margin for WET SEAL INC is rather low; currently it is at 15.66%. It has decreased significantly from the same period last year. Along with this, the net profit margin of -34.46% is significantly below that of the industry average.
  • Net operating cash flow has significantly decreased to -$16.05 million or 132.15% when compared to the same quarter last year. In addition, when comparing to the industry average, the firm's growth rate is much lower.
  • Despite any intermediate fluctuations, we have only bad news to report on this stock's performance over the last year: it has tumbled by 96.86%, worse than the S&P 500's performance. Consistent with the plunge in the stock price, the company's earnings per share are down 186.66% compared to the year-earlier 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.
  • WET SEAL 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 reported somewhat volatile earnings recently. We feel it is likely to report a decline in earnings in the coming year. During the past fiscal year, WET SEAL INC continued to lose money by earning -$0.45 versus -$1.28 in the prior year. For the next year, the market is expecting a contraction of 86.7% in earnings (-$0.84 versus -$0.45).

You can view the full analysis from the report here: Wet Seal 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.

Liberty Interactive ( LINTB) was another company that pushed the Retail industry higher today. Liberty Interactive was up $0.66 (2.4%) to $28.61 on light volume. Throughout the day, 200 shares of Liberty Interactive exchanged hands as compared to its average daily volume of 800 shares. The stock ranged in a price between $28.61-$28.61 after having opened the day at $28.61 as compared to the previous trading day's close of $27.95.

Liberty Interactive has a market cap of $868.4 million and is part of the services sector. Shares are down 5.9% year-to-date as of the close of trading on Wednesday.

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.