3 Stocks Moving The Wholesale Industry Upward

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 121 points (0.7%) at 17,751 as of Wednesday, July 29, 2015, 4:20 PM ET. The NYSE advances/declines ratio sits at 2,248 issues advancing vs. 830 declining with 135 unchanged.

The Wholesale industry as a whole closed the day up 0.7% versus the S&P 500, which was up 0.7%. Top gainers within the Wholesale industry included Addvantage Technologies Group ( AEY), up 2.2%, Huttig Building Products ( HBP), up 2.1%, Empire Resources ( ERS), up 2.8%, China Auto Logistics ( CALI), up 9.3% and Richardson Electronics ( RELL), up 1.5%.

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

Richardson Electronics ( RELL) is one of the companies that pushed the Wholesale industry higher today. Richardson Electronics was up $0.10 (1.5%) to $6.63 on heavy volume. Throughout the day, 110,899 shares of Richardson Electronics exchanged hands as compared to its average daily volume of 16,200 shares. The stock ranged in a price between $6.53-$6.85 after having opened the day at $6.53 as compared to the previous trading day's close of $6.53.

Richardson Electronics, Ltd. provides engineered solutions, power grid microwave tubes and related components, and customized display solutions. Richardson Electronics has a market cap of $76.8 million and is part of the services sector. Shares are down 34.7% year-to-date as of the close of trading on Tuesday. Currently there are no analysts who rate Richardson Electronics a buy, no analysts rate it a sell, and none rate it a hold.

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TheStreet Ratings rates Richardson Electronics 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 RELL 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 Electronic Equipment, Instruments & Components industry and the overall market, RICHARDSON ELECTRONICS LTD'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 -$1.74 million or 128.72% 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 RICHARDSON ELECTRONICS LTD is currently lower than what is desirable, coming in at 30.61%. Regardless of RELL's low profit margin, it has managed to increase from the same period last year. Despite the mixed results of the gross profit margin, RELL's net profit margin of -6.35% significantly underperformed when compared to the industry average.
  • RELL'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 29.25%, which is also worse that the performance of the S&P 500 Index. Investors have so far failed to pay much attention to the earnings improvements the company has managed to achieve over the last 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.
  • RICHARDSON ELECTRONICS LTD has improved earnings per share by 25.0% 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, RICHARDSON ELECTRONICS LTD reported poor results of -$0.40 versus -$0.04 in the prior year.

You can view the full analysis from the report here: Richardson Electronics Ratings Report

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At the close, China Auto Logistics ( CALI) was up $0.09 (9.3%) to $1.06 on light volume. Throughout the day, 4,459 shares of China Auto Logistics exchanged hands as compared to its average daily volume of 40,500 shares. The stock ranged in a price between $1.02-$1.10 after having opened the day at $1.02 as compared to the previous trading day's close of $0.97.

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 $3.9 million and is part of the services sector. Shares are down 9.3% year-to-date as of the close of trading on Tuesday. Currently there are no analysts who rate China Auto Logistics a buy, no analysts rate it a sell, and none rate it a hold.

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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 5.85 and currently higher than the industry average, implying increased risk associated with the management of debt levels within the company. Along with this, the company manages to maintain a quick ratio of 0.50, which clearly demonstrates the inability to cover short-term cash 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 0.59%. It has decreased from the same quarter the previous year. Along with this, the net profit margin of -3.05% is significantly below that of the industry average.
  • 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 swung to a loss, reporting -$6.66 versus $0.16 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 98.1% when compared to the same quarter one year ago, falling from -$1.35 million to -$2.67 million.

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

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Addvantage Technologies Group ( AEY) was another company that pushed the Wholesale industry higher today. Addvantage Technologies Group was up $0.05 (2.2%) to $2.28 on light volume. Throughout the day, 1,050 shares of Addvantage Technologies Group exchanged hands as compared to its average daily volume of 9,100 shares. The stock ranged in a price between $2.27-$2.28 after having opened the day at $2.28 as compared to the previous trading day's close of $2.23.

ADDvantage Technologies Group, Inc. distributes and services a line of electronics and hardware products for the cable television and telecommunication industries worldwide. It also provide equipment repair services to cable operators. Addvantage Technologies Group has a market cap of $22.9 million and is part of the services sector. Shares are down 8.6% year-to-date as of the close of trading on Tuesday. Currently there are no analysts who rate Addvantage Technologies Group a buy, no analysts rate it a sell, and none rate it a hold.

TheStreet Ratings rates Addvantage Technologies Group as a buy. The company's strengths can be seen in multiple areas, such as its robust revenue growth, largely solid financial position with reasonable debt levels by most measures, compelling growth in net income, attractive valuation levels and expanding profit margins. We feel its strengths outweigh the fact that the company shows weak operating cash flow.

Highlights from TheStreet Ratings analysis on AEY go as follows:

  • The revenue growth greatly exceeded the industry average of 1.9%. Since the same quarter one year prior, revenues rose by 36.7%. This growth in revenue appears to have trickled down to the company's bottom line, improving the earnings per share.
  • AEY's debt-to-equity ratio is very low at 0.14 and is currently below that of the industry average, implying that there has been very successful management of debt levels. Along with the favorable debt-to-equity ratio, the company maintains an adequate quick ratio of 1.39, which illustrates the ability to avoid short-term cash problems.
  • The net income growth from the same quarter one year ago has significantly exceeded that of the S&P 500 and the Electronic Equipment, Instruments & Components industry. The net income increased by 126.2% when compared to the same quarter one year prior, rising from -$0.89 million to $0.23 million.
  • 37.34% is the gross profit margin for ADDVANTAGE TECHNOLOGIES GP which we consider to be strong. 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 2.05% trails the industry average.

You can view the full analysis from the report here: Addvantage Technologies Group Ratings Report

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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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