3 Stocks Advancing The Retail Industry

One out of the three major indices traded up today Two out of the three major indices traded up today with the Dow Jones Industrial Average ( ^DJI) trading down 0.33 points (0.0%) at 17,403 as of Wednesday, Aug. 12, 2015, 4:20 PM ET. The NYSE advances/declines ratio sits at 1,537 issues advancing vs. 1,563 declining with 108 unchanged.

The Retail industry as a whole closed the day down 0.2% versus the S&P 500, which was up 0.1%. Top gainers within the Retail industry included Acorn International ( ATV), up 5.0%, Gordman's Stores ( GMAN), up 4.9%, Fairway Group Holdings ( FWM), up 3.1%, HHGregg ( HGG), up 5.2% and Christopher & Banks ( CBK), up 2.4%.

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

Fairway Group Holdings ( FWM) is one of the companies that pushed the Retail industry higher today. Fairway Group Holdings was up $0.07 (3.1%) to $2.31 on average volume. Throughout the day, 430,326 shares of Fairway Group Holdings exchanged hands as compared to its average daily volume of 316,000 shares. The stock ranged in a price between $2.16-$2.44 after having opened the day at $2.24 as compared to the previous trading day's close of $2.24.

Fairway Group Holdings Corp., together with its subsidiaries, operates as a food retailer in the United States. Fairway Group Holdings has a market cap of $65.9 million and is part of the services sector. Shares are down 28.9% year-to-date as of the close of trading on Tuesday. Currently there is 1 analyst who rates Fairway Group Holdings a buy, 1 analyst rates it a sell, and 1 rates it a hold.

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TheStreet Ratings rates Fairway Group Holdings as a sell. The company's weaknesses can be seen in multiple areas, such as its poor profit margins, weak operating cash flow and generally disappointing historical performance in the stock itself.

Highlights from TheStreet Ratings analysis on FWM go as follows:

  • The gross profit margin for FAIRWAY GROUP HOLDINGS is currently lower than what is desirable, coming in at 32.21%. It has decreased from the same quarter the previous year. Along with this, the net profit margin of -4.29% trails that of the industry average.
  • Net operating cash flow has significantly decreased to $1.20 million or 90.59% when compared to the same quarter last year. In addition, when comparing to the industry average, the firm's growth rate is much lower.
  • FWM'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 59.94%, 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.
  • Regardless of the drop in revenue, the company managed to outperform against the industry average of 4.2%. Since the same quarter one year prior, revenues slightly dropped by 0.6%. The declining revenue has not hurt the company's bottom line, with increasing earnings per share.
  • FAIRWAY GROUP HOLDINGS's earnings per share improvement from the most recent quarter was slightly positive. The company has demonstrated a pattern of positive earnings per share growth over the past year. We feel that this trend should continue. This trend suggests that the performance of the business is improving. During the past fiscal year, FAIRWAY GROUP HOLDINGS continued to lose money by earning -$1.07 versus -$1.93 in the prior year. This year, the market expects an improvement in earnings (-$0.78 versus -$1.07).

You can view the full analysis from the report here: Fairway Group Holdings Ratings Report

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At the close, Gordman's Stores ( GMAN) was up $0.20 (4.9%) to $4.28 on heavy volume. Throughout the day, 203,366 shares of Gordman's Stores exchanged hands as compared to its average daily volume of 128,100 shares. The stock ranged in a price between $4.05-$4.33 after having opened the day at $4.05 as compared to the previous trading day's close of $4.08.

Gordmans Stores, Inc. operates department stores under the Gordmans name in the United States. Its merchandise selection includes a range of apparel, footwear, and home fashions products, as well as accessories. Gordman's Stores has a market cap of $83.0 million and is part of the services sector. Shares are up 49.5% year-to-date as of the close of trading on Tuesday. Currently there is 1 analyst who rates Gordman's Stores a buy, no analysts rate it a sell, and 2 rate it a hold.

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TheStreet Ratings rates Gordman's Stores 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 high debt management risk.

Highlights from TheStreet Ratings analysis on GMAN 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 Multiline Retail industry and the overall market, GORDMANS STORES INC'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 $0.52 million or 98.39% when compared to the same quarter last year. In addition, when comparing to the industry average, the firm's growth rate is much lower.
  • Even though the current debt-to-equity ratio is 1.12, it is still below the industry average, suggesting that this level of debt is acceptable within the Multiline Retail industry. Even though the debt-to-equity ratio shows mixed results, the company's quick ratio of 0.21 is very low and demonstrates very weak liquidity.
  • GORDMANS STORES INC reported significant earnings per share improvement in the most recent quarter compared to the same quarter a year ago. This company has reported somewhat volatile earnings recently. But, we feel it is poised for EPS growth in the coming year. During the past fiscal year, GORDMANS STORES INC swung to a loss, reporting -$0.18 versus $0.42 in the prior year. This year, the market expects an improvement in earnings (-$0.05 versus -$0.18).
  • 43.79% is the gross profit margin for GORDMANS STORES INC 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 0.25% trails the industry average.

You can view the full analysis from the report here: Gordman's Stores Ratings Report

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Acorn International ( ATV) was another company that pushed the Retail industry higher today. Acorn International was up $0.05 (5.0%) to $1.05 on light volume. Throughout the day, 8,564 shares of Acorn International exchanged hands as compared to its average daily volume of 21,500 shares. The stock ranged in a price between $0.97-$1.08 after having opened the day at $0.99 as compared to the previous trading day's close of $1.00.

Acorn International, Inc., an integrated multi-platform marketing company, develops, promotes, and sells a portfolio of proprietary-branded products; and third parties products in the People's Republic of China. Acorn International has a market cap of $27.4 million and is part of the services sector. Shares are down 40.5% year-to-date as of the close of trading on Tuesday. Currently there are no analysts who rate Acorn International a buy, no analysts rate it a sell, and none rate it a hold.

TheStreet Ratings rates Acorn International as a sell. The company's weaknesses can be seen in multiple areas, such as its disappointing return on equity, poor profit margins, feeble growth in its earnings per share and generally disappointing historical performance in the stock itself.

Highlights from TheStreet Ratings analysis on ATV 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 Internet & Catalog Retail industry and the overall market, ACORN INTERNATIONAL INC -ADR's return on equity significantly trails that of both the industry average and the S&P 500.
  • The gross profit margin for ACORN INTERNATIONAL INC -ADR is currently lower than what is desirable, coming in at 34.58%. It has decreased significantly from the same period last year. Along with this, the net profit margin of -66.94% is significantly below that of the industry average.
  • ACORN INTERNATIONAL INC -ADR reported flat earnings per share in the most recent quarter. The company has reported a trend of declining earnings per share over the past two years. During the past fiscal year, ACORN INTERNATIONAL INC -ADR reported poor results of -$1.62 versus -$1.45 in the prior year.
  • ATV'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 49.76%, which is also worse than the performance of the S&P 500 Index. 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.
  • The revenue fell significantly faster than the industry average of 33.5%. Since the same quarter one year prior, revenues fell by 42.4%. Weakness in the company's revenue seems to not be hurting the bottom line, shown by stable earnings per share.

You can view the full analysis from the report here: Acorn International 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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