3 Stocks Pushing The Diversified Services Industry Lower

The Diversified Services industry as a whole closed the day down 0.9% versus the S&P 500, which was down 0.8%. Laggards within the Diversified Services industry included Onvia ( ONVI), down 4.8%, Compx International ( CIX), down 6.2%, Document Security Systems ( DSS), down 4.5%, Amrep ( AXR), down 1.6% and ATRM Holdings ( ATRM), down 5.6%.

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

Amrep ( AXR) is one of the companies that pushed the Diversified Services industry lower today. Amrep was down $0.08 (1.6%) to $5.04 on light volume. Throughout the day, 1,237 shares of Amrep exchanged hands as compared to its average daily volume of 2,700 shares. The stock ranged in price between $5.03-$5.04 after having opened the day at $5.03 as compared to the previous trading day's close of $5.12.

AMREP Corporation, through its subsidiaries, is engaged in media services and real estate businesses in the United States. Amrep has a market cap of $41.1 million and is part of the financial sector. Shares are up 33.3% year-to-date as of the close of trading on Wednesday.

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TheStreet Ratings rates Amrep 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 AXR go as follows:

  • Reflecting the weaknesses we have cited, including the decline in the company's earnings per share, AXR has underperformed the S&P 500 Index, declining 6.35% 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 AMREP CORP is rather low; currently it is at 19.00%. Regardless of AXR'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 1.45% trails the industry average.
  • 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 Commercial Services & Supplies industry and the overall market, AMREP CORP's return on equity significantly trails that of both the industry average and the S&P 500.
  • AMREP CORP's earnings per share declined 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, AMREP CORP continued to lose money by earning -$0.43 versus -$0.47 in the prior year.
  • AXR, with its decline in revenue, underperformed when compared the industry average of 3.6%. Since the same quarter one year prior, revenues fell by 20.6%. 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: Amrep Ratings Report

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At the close, Document Security Systems ( DSS) was down $0.01 (4.5%) to $0.19 on average volume. Throughout the day, 53,044 shares of Document Security Systems exchanged hands as compared to its average daily volume of 63,500 shares. The stock ranged in price between $0.19-$0.20 after having opened the day at $0.20 as compared to the previous trading day's close of $0.20.

Document Security Systems, Inc., through its subsidiaries, develops, manufactures, markets, and sells paper and plastic products to protect information from unauthorized scanning, copying, and digital imaging in the United States and internationally. Document Security Systems has a market cap of $9.3 million and is part of the financial sector. Shares are down 55.6% year-to-date as of the close of trading on Wednesday. Currently there is 1 analyst who rates Document Security Systems a buy, no analysts rate it a sell, and none rate it a hold.

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TheStreet Ratings rates Document Security Systems as a sell. The company's weaknesses can be seen in multiple areas, such as its disappointing return on equity, weak operating cash flow and generally disappointing historical performance in the stock itself.

Highlights from TheStreet Ratings analysis on DSS go as follows:

  • 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 Software industry and the overall market, DOCUMENT SECURITY SYS INC's return on equity significantly trails that of both the industry average and the S&P 500.
  • Net operating cash flow has declined marginally to -$0.53 million or 8.40% when compared to the same quarter last year. Despite a decrease in cash flow DOCUMENT SECURITY SYS INC is still fairing well by exceeding its industry average cash flow growth rate of -27.40%.
  • DSS'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 84.97%, 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.
  • DOCUMENT SECURITY SYS INC has improved earnings per share by 42.9% 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, DOCUMENT SECURITY SYS INC swung to a loss, reporting -$0.98 versus $0.04 in the prior year.
  • Despite currently having a low debt-to-equity ratio of 0.55, it is higher than that of the industry average, inferring that management of debt levels may need to be evaluated further. Regardless of the somewhat mixed results with the debt-to-equity ratio, the company's quick ratio of 0.92 is weak.

You can view the full analysis from the report here: Document Security Systems Ratings Report

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Compx International ( CIX) was another company that pushed the Diversified Services industry lower today. Compx International was down $0.74 (6.2%) to $11.16 on heavy volume. Throughout the day, 2,085 shares of Compx International exchanged hands as compared to its average daily volume of 600 shares. The stock ranged in price between $11.16-$11.91 after having opened the day at $11.91 as compared to the previous trading day's close of $11.90.

CompX International Inc. engages in the manufacture and sale of security products and recreational marine components primarily in North America. The company operates through two segments, Security Products and Marine Components. Compx International has a market cap of $28.6 million and is part of the financial sector. Shares are down 1.6% year-to-date as of the close of trading on Wednesday.

TheStreet Ratings rates Compx International 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, increase in stock price during the past year, growth in earnings per share and increase in net income. We feel its strengths outweigh the fact that the company shows weak operating cash flow.

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Highlights from TheStreet Ratings analysis on CIX go as follows:

  • The revenue growth came in higher than the industry average of 3.6%. Since the same quarter one year prior, revenues slightly increased by 8.2%. This growth in revenue appears to have trickled down to the company's bottom line, improving the earnings per share.
  • CIX has no debt to speak of therefore resulting in a debt-to-equity ratio of zero, which we consider to be a relatively favorable sign. Along with this, the company maintains a quick ratio of 5.13, which clearly demonstrates the ability to cover short-term cash needs.
  • The stock has risen over the past year as investors have generally rewarded the company for its earnings growth and other positive factors like the ones we have cited in this report. Turning our attention to the future direction of the stock, it goes without saying that even the best stocks can fall in an overall down market. However, in any other environment, this stock still has good upside potential despite the fact that it has already risen in the past year.
  • COMPX INTERNATIONAL INC has improved earnings per share by 11.8% in the most recent quarter compared to the same quarter a year ago. The company has demonstrated a pattern of positive earnings per share growth over the past two years. During the past fiscal year, COMPX INTERNATIONAL INC increased its bottom line by earning $0.70 versus $0.49 in the prior year.
  • The company, on the basis of net income growth from the same quarter one year ago, has significantly outperformed against the S&P 500 and exceeded that of the Commercial Services & Supplies industry average. The net income increased by 12.8% when compared to the same quarter one year prior, going from $2.14 million to $2.41 million.

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

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