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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