3 Stocks Raising The Diversified Services 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 110 points (0.6%) at 17,972 as of Thursday, Feb. 12, 2015, 4:20 PM ET. The NYSE advances/declines ratio sits at 2,425 issues advancing vs. 677 declining with 121 unchanged.

The Diversified Services industry as a whole closed the day up 1.3% versus the S&P 500, which was up 1.0%. Top gainers within the Diversified Services industry included Internet Patents ( PTNT), up 3.1%, VirtualScopics ( VSCP), up 3.8%, Corporate Resource Services ( CRRS), up 4.0%, EnviroStar ( EVI), up 4.5% and Lime Energy ( LIME), up 5.5%.

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

Lime Energy ( LIME) is one of the companies that pushed the Diversified Services industry higher today. Lime Energy was up $0.14 (5.5%) to $2.69 on light volume. Throughout the day, 1,616 shares of Lime Energy exchanged hands as compared to its average daily volume of 10,100 shares. The stock ranged in a price between $2.58-$2.69 after having opened the day at $2.59 as compared to the previous trading day's close of $2.55.

Lime Energy Co. is engaged in designing and implementing energy efficiency programs for utilities in the United States. Lime Energy has a market cap of $24.0 million and is part of the services sector. Shares are down 13.0% year-to-date as of the close of trading on Wednesday. Currently there are no analysts who rate Lime Energy a buy, no analysts rate 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 Lime Energy as a sell. The company's weaknesses can be seen in multiple areas, such as its generally disappointing historical performance in the stock itself and poor profit margins.

Highlights from TheStreet Ratings analysis on LIME go as follows:

  • LIME has underperformed the S&P 500 Index, declining 5.56% 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.
  • The gross profit margin for LIME ENERGY CO is currently lower than what is desirable, coming in at 32.26%. Regardless of LIME'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 0.57% trails the industry average.
  • 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 Electrical Equipment industry and the overall market, LIME ENERGY CO's return on equity significantly trails that of both the industry average and the S&P 500.
  • LIME's debt-to-equity ratio is very low at 0.12 and is currently below that of the industry average, implying that there has been very successful management of debt levels. Despite the fact that LIME's debt-to-equity ratio is low, the quick ratio, which is currently 0.55, displays a potential problem in covering short-term cash needs.
  • Net operating cash flow has significantly increased by 97.22% to -$0.04 million when compared to the same quarter last year. In addition, LIME ENERGY CO has also vastly surpassed the industry average cash flow growth rate of -44.87%.

You can view the full analysis from the report here: Lime Energy 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, Corporate Resource Services ( CRRS) was up $0.01 (4.0%) to $0.24 on heavy volume. Throughout the day, 160,923 shares of Corporate Resource Services exchanged hands as compared to its average daily volume of 92,300 shares. The stock ranged in a price between $0.23-$0.26 after having opened the day at $0.24 as compared to the previous trading day's close of $0.24.

Corporate Resource Services has a market cap of $35.7 million and is part of the services sector. Shares are down 81.2% year-to-date as of the close of trading on Wednesday.

STOCKS TO BUY: TheStreet Quant Ratings has identified a handful of stocks that can potentially TRIPLE in the next 12 months. Learn more.

VirtualScopics ( VSCP) was another company that pushed the Diversified Services industry higher today. VirtualScopics was up $0.12 (3.8%) to $3.30 on light volume. Throughout the day, 100 shares of VirtualScopics exchanged hands as compared to its average daily volume of 4,400 shares. The stock ranged in a price between $3.30-$3.30 after having opened the day at $3.30 as compared to the previous trading day's close of $3.18.

VirtualScopics, Inc. provides imaging solutions for the pharmaceutical, biotechnology, and medical device industries. VirtualScopics has a market cap of $9.3 million and is part of the services sector. Shares are up 0.3% year-to-date as of the close of trading on Wednesday. Currently there is 1 analyst who rates VirtualScopics a buy, no analysts rate it a sell, and none rate it a hold.

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, poor profit margins, weak operating cash flow and generally disappointing historical performance in the stock itself.

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 27.3% when compared to the same quarter one year ago, falling from -$0.75 million to -$0.96 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.
  • The gross profit margin for VIRTUALSCOPICS INC is currently lower than what is desirable, coming in at 33.86%. It has decreased from the same quarter the previous year. Along with this, the net profit margin of -34.87% is significantly below that of the industry average.
  • Net operating cash flow has significantly decreased to -$0.42 million or 200.00% when compared to the same quarter last year. In addition, when comparing to the industry average, the firm's growth rate is much lower.
  • Reflecting the weaknesses we have cited, including the decline in the company's earnings per share, VSCP has underperformed the S&P 500 Index, declining 13.20% 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.

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.

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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