3 Stocks Driving The Specialty Retail 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.

All three major indices traded up today with the Dow Jones Industrial Average ( ^DJI) trading up 139 points (0.8%) at 17,996 as of Monday, March 9, 2015, 4:20 PM ET. The NYSE advances/declines ratio sits at 1,624 issues advancing vs. 1,454 declining with 140 unchanged.

The Specialty Retail industry as a whole closed the day up 0.5% versus the S&P 500, which was up 0.4%. Top gainers within the Specialty Retail industry included DGSE Companies ( DGSE), up 3.9%, Birks Group ( BGI), up 1.6%, Mecox Lane ( MCOX), up 1.9%, Trans World Entertainment ( TWMC), up 1.6% and Odyssey Marine Exploration ( OMEX), up 8.7%.

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

Odyssey Marine Exploration ( OMEX) is one of the companies that pushed the Specialty Retail industry higher today. Odyssey Marine Exploration was up $0.05 (8.7%) to $0.60 on light volume. Throughout the day, 253,304 shares of Odyssey Marine Exploration exchanged hands as compared to its average daily volume of 353,700 shares. The stock ranged in a price between $0.56-$0.60 after having opened the day at $0.57 as compared to the previous trading day's close of $0.55.

Odyssey Marine Exploration, Inc., together with its subsidiaries, is engaged in the archaeologically sensitive exploration and recovery of deep-ocean shipwrecks worldwide. Odyssey Marine Exploration has a market cap of $50.5 million and is part of the services sector. Shares are down 40.6% year-to-date as of the close of trading on Friday. Currently there are 2 analysts who rate Odyssey Marine Exploration a buy, no analysts rate it a sell, and none rate it a hold.

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TheStreet Ratings rates Odyssey Marine Exploration as a sell. The company's weaknesses can be seen in multiple areas, such as its unimpressive growth in net income, generally high debt management risk, generally disappointing historical performance in the stock itself and feeble growth in its earnings per share.

Highlights from TheStreet Ratings analysis on OMEX 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 Professional Services industry. The net income has significantly decreased by 695.6% when compared to the same quarter one year ago, falling from -$0.93 million to -$7.42 million.
  • The debt-to-equity ratio is very high at 26.04 and currently higher than the industry average, implying increased risk associated with the management of debt levels within the company. To add to this, OMEX has a quick ratio of 0.56, this demonstrates the lack of ability of the company to cover short-term liquidity needs.
  • Despite any intermediate fluctuations, we have only bad news to report on this stock's performance over the last year: it has tumbled by 74.79%, worse than the S&P 500's performance. Consistent with the plunge in the stock price, the company's earnings per share are down 800.00% 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.
  • ODYSSEY MARINE EXPLORATION 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, ODYSSEY MARINE EXPLORATION continued to lose money by earning -$0.14 versus -$0.25 in the prior year. For the next year, the market is expecting a contraction of 150.0% in earnings (-$0.35 versus -$0.14).
  • OMEX, with its very weak revenue results, has greatly underperformed against the industry average of 4.4%. Since the same quarter one year prior, revenues plummeted by 97.8%. The declining revenue appears to have seeped down to the company's bottom line, decreasing earnings per share.

You can view the full analysis from the report here: Odyssey Marine Exploration 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, Trans World Entertainment ( TWMC) was up $0.06 (1.6%) to $3.85 on light volume. Throughout the day, 4,222 shares of Trans World Entertainment exchanged hands as compared to its average daily volume of 25,300 shares. The stock ranged in a price between $3.83-$3.91 after having opened the day at $3.83 as compared to the previous trading day's close of $3.79.

Trans World Entertainment Corporation, together with its subsidiaries, operates as a specialty retailer of entertainment products, including video, music, electronics, trend items, video games, accessories, and related products through its retail stores and e-commerce sites. Trans World Entertainment has a market cap of $115.4 million and is part of the services sector. Shares are up 15.2% year-to-date as of the close of trading on Friday. Currently there are no analysts who rate Trans World Entertainment 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 Trans World Entertainment as a hold. The company's strengths can be seen in multiple areas, such as its largely solid financial position with reasonable debt levels by most measures, good cash flow from operations 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 deteriorating net income.

Highlights from TheStreet Ratings analysis on TWMC go as follows:

  • TWMC's debt-to-equity ratio is very low at 0.01 and is currently below that of the industry average, implying that there has been very successful management of debt levels.
  • Net operating cash flow has significantly increased by 96.34% to -$0.20 million when compared to the same quarter last year. In addition, TRANS WORLD ENTMT CORP has also vastly surpassed the industry average cash flow growth rate of 9.17%.
  • 39.56% is the gross profit margin for TRANS WORLD ENTMT CORP 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 -6.17% is in-line with the industry average.
  • TRANS WORLD ENTMT CORP's earnings per share declined by 40.0% 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, TRANS WORLD ENTMT CORP reported lower earnings of $0.26 versus $1.05 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 35.0% when compared to the same quarter one year ago, falling from -$3.32 million to -$4.48 million.

You can view the full analysis from the report here: Trans World Entertainment 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.

Mecox Lane ( MCOX) was another company that pushed the Specialty Retail industry higher today. Mecox Lane was up $0.08 (1.9%) to $4.18 on average volume. Throughout the day, 14,500 shares of Mecox Lane exchanged hands as compared to its average daily volume of 14,700 shares. The stock ranged in a price between $4.15-$4.22 after having opened the day at $4.22 as compared to the previous trading day's close of $4.10.

Mecox Lane Limited designs and sells health and beauty products through various retail channels in the People's Republic of China. It offers beauty and healthcare products, including skin care, fragrance, cosmetics, and other personal care products. Mecox Lane has a market cap of $53.3 million and is part of the services sector. Shares are up 9.9% year-to-date as of the close of trading on Friday. Currently there are no analysts who rate Mecox Lane a buy, no analysts rate it a sell, and none rate it a hold.

TheStreet Ratings rates Mecox Lane as a sell. Among the areas we feel are negative, one of the most important has been an overall disappointing return on equity.

Highlights from TheStreet Ratings analysis on MCOX go as follows:

  • The company's current return on equity has slightly decreased from the same quarter one year prior. This implies a minor weakness in the organization. Compared to other companies in the Internet & Catalog Retail industry and the overall market, MECOX LANE LTD's return on equity significantly trails that of both the industry average and the S&P 500.
  • MECOX LANE LTD 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, MECOX LANE LTD reported poor results of -$2.20 versus -$1.95 in the prior year.
  • The revenue fell significantly faster than the industry average of 1.8%. Since the same quarter one year prior, revenues fell by 38.9%. The declining revenue has not hurt the company's bottom line, with increasing earnings per share.
  • Compared to where it was 12 months ago, the stock is up, but it has so far lagged the appreciation in the S&P 500. Turning our attention to the future direction of the stock, we do not believe this stock offers ample reward opportunity to compensate for the risks, despite the fact that it rose over the past year.
  • The gross profit margin for MECOX LANE LTD is rather high; currently it is at 63.84%. It has increased significantly from the same period last year. Regardless of the strong results of the gross profit margin, the net profit margin of -1.82% trails the industry average.

You can view the full analysis from the report here: Mecox Lane 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.

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