3 Stocks Pushing The Services Sector Lower

The Services sector as a whole closed the day down 0.2% versus the S&P 500, which was up 0.2%. Laggards within the Services sector included Birks Group ( BGI), down 4.8%, Radio One ( ROIA), down 2.4%, Document Security Systems ( DSS), down 4.8%, Industrial Services of America ( IDSA), down 2.8% and AeroCentury ( ACY), down 2.5%.

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

Industrial Services of America ( IDSA) is one of the companies that pushed the Services sector lower today. Industrial Services of America was down $0.11 (2.8%) to $3.89 on average volume. Throughout the day, 4,042 shares of Industrial Services of America exchanged hands as compared to its average daily volume of 3,100 shares. The stock ranged in price between $3.88-$3.92 after having opened the day at $3.88 as compared to the previous trading day's close of $4.00.

Industrial Services of America, Inc. operates as a recycler of stainless steel, ferrous, and non-ferrous scrap in the United States and Canada. It operates in two segments, Recycling and Waste Services. Industrial Services of America has a market cap of $31.5 million and is part of the transportation industry. Shares are down 33.0% year-to-date as of the close of trading on Wednesday.

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TheStreet Ratings rates Industrial Services of America as a sell. The company's weaknesses can be seen in multiple areas, such as its unimpressive growth in net income and generally disappointing historical performance in the stock itself.

Highlights from TheStreet Ratings analysis on IDSA 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 Commercial Services & Supplies industry. The net income has significantly decreased by 380.8% when compared to the same quarter one year ago, falling from -$0.65 million to -$3.10 million.
  • Despite any intermediate fluctuations, we have only bad news to report on this stock's performance over the last year: it has tumbled by 38.52%, worse than the S&P 500's performance. Consistent with the plunge in the stock price, the company's earnings per share are down 333.33% 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.
  • The company's current return on equity greatly increased when compared to its ROE from the same quarter one year prior. This is a signal of significant strength within the corporation. Compared to other companies in the Commercial Services & Supplies industry and the overall market, INDUSTRIAL SERVICES AMER INC's return on equity significantly trails that of both the industry average and the S&P 500.
  • INDUSTRIAL SERVICES AMER 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. 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, INDUSTRIAL SERVICES AMER INC continued to lose money by earning -$0.97 versus -$1.96 in the prior year.
  • IDSA, with its decline in revenue, underperformed when compared the industry average of 5.2%. Since the same quarter one year prior, revenues fell by 29.1%. Weakness in the company's revenue seems to have hurt the bottom line, decreasing earnings per share.

You can view the full analysis from the report here: Industrial Services of America Ratings Report

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At the close, Document Security Systems ( DSS) was down $0.01 (4.8%) to $0.18 on average volume. Throughout the day, 54,557 shares of Document Security Systems exchanged hands as compared to its average daily volume of 63,000 shares. The stock ranged in price between $0.18-$0.19 after having opened the day at $0.18 as compared to the previous trading day's close of $0.19.

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 $8.3 million and is part of the transportation industry. Shares are down 58.0% 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 -27.87%.
  • 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 86.03%, 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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Radio One ( ROIA) was another company that pushed the Services sector lower today. Radio One was down $0.06 (2.4%) to $2.44 on heavy volume. Throughout the day, 3,500 shares of Radio One exchanged hands as compared to its average daily volume of 2,200 shares. The stock ranged in price between $2.42-$2.44 after having opened the day at $2.42 as compared to the previous trading day's close of $2.50.

Radio One, Inc., together with its subsidiaries, operates as an urban-oriented multi-media company in the United States. The company operates through four segments: Radio Broadcasting, Reach Media, Internet, and Cable Television. Radio One has a market cap of $5.6 million and is part of the transportation industry. Shares are up 52.4% year-to-date as of the close of trading on Wednesday.

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

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Highlights from TheStreet Ratings analysis on ROIA go as follows:

  • The debt-to-equity ratio is very high at 494.14 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 0.29, 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 Media industry and the overall market, RADIO ONE 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 $0.48 million or 56.76% when compared to the same quarter last year. In addition, when comparing to the industry average, the firm's growth rate is much lower.
  • ROIA has underperformed the S&P 500 Index, declining 20.30% 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.
  • RADIO ONE INC has improved earnings per share by 26.4% 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, RADIO ONE INC reported poor results of -$1.32 versus -$1.30 in the prior year.

You can view the full analysis from the report here: Radio One Ratings Report

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