3 Stocks Pushing The Financial Services Industry Lower

The Financial Services industry as a whole closed the day down 0.6% versus the S&P 500, which was down 0.9%. Laggards within the Financial Services industry included First Trust Brazil AlphaDEX Fund ( FBZ), down 3.5%, First Trust International IPO ETF ( FPXI), down 1.6%, Marine Petroleum ( MARPS), down 2.1%, China Ceramics ( CCCL), down 5.0% and Value Line ( VALU), down 5.8%.

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

Credit Acceptance ( CACC) is one of the companies that pushed the Financial Services industry lower today. Credit Acceptance was down $8.57 (4.2%) to $193.95 on heavy volume. Throughout the day, 196,657 shares of Credit Acceptance exchanged hands as compared to its average daily volume of 111,600 shares. The stock ranged in price between $193.56-$202.56 after having opened the day at $201.52 as compared to the previous trading day's close of $202.52.

Credit Acceptance Corporation provides automobile dealers financing programs, and related products and services that enable them to sell vehicles to consumers. Credit Acceptance has a market cap of $4.3 billion and is part of the financial sector. Shares are up 48.5% year-to-date as of the close of trading on Tuesday. Currently there are no analysts who rate Credit Acceptance a buy, 4 analysts rate it a sell, and 3 rate it a hold.

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TheStreet Ratings rates Credit Acceptance as a buy. The company's strengths can be seen in multiple areas, such as its revenue growth, impressive record of earnings per share growth, increase in net income, expanding profit margins and solid stock price performance. We feel its strengths outweigh the fact that the company has had generally high debt management risk by most measures that we evaluated.

Highlights from TheStreet Ratings analysis on CACC go as follows:

  • The revenue growth came in higher than the industry average of 12.3%. Since the same quarter one year prior, revenues rose by 12.9%. Growth in the company's revenue appears to have helped boost the earnings per share.
  • CREDIT ACCEPTANCE CORP has improved earnings per share by 15.7% 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. We feel that this trend should continue. During the past fiscal year, CREDIT ACCEPTANCE CORP increased its bottom line by earning $12.01 versus $10.59 in the prior year. This year, the market expects an improvement in earnings ($14.39 versus $12.01).
  • The net income growth from the same quarter one year ago has exceeded that of the S&P 500 and greatly outperformed compared to the Consumer Finance industry average. The net income increased by 6.9% when compared to the same quarter one year prior, going from $69.40 million to $74.20 million.
  • The gross profit margin for CREDIT ACCEPTANCE CORP is rather high; currently it is at 68.14%. Regardless of CACC's high profit margin, it has managed to decrease from the same period last year. Despite the mixed results of the gross profit margin, CACC's net profit margin of 36.53% significantly outperformed against the industry.
  • Investors have apparently begun to recognize positive factors similar to those we have mentioned in this report, including earnings growth. This has helped drive up the company's shares by a sharp 66.76% over the past year, a rise that has exceeded that of the S&P 500 Index. Looking ahead, the stock's sharp rise over the last year has already helped drive it to a level which is relatively expensive compared to the rest of its industry. We feel, however, that other strengths this company displays justify these higher price levels.

You can view the full analysis from the report here: Credit Acceptance Ratings Report

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At the close, Value Line ( VALU) was down $0.83 (5.8%) to $13.61 on light volume. Throughout the day, 444 shares of Value Line exchanged hands as compared to its average daily volume of 2,500 shares. The stock ranged in price between $13.61-$13.61 after having opened the day at $13.61 as compared to the previous trading day's close of $14.44.

Value Line, Inc. produces and sells investment related periodical publications primarily in the United States. Value Line has a market cap of $131.3 million and is part of the financial sector. Shares are down 11.4% year-to-date as of the close of trading on Tuesday.

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TheStreet Ratings rates Value Line as a hold. The company's strengths can be seen in multiple areas, such as its notable return on equity and largely solid financial position with reasonable debt levels by most measures. However, as a counter to these strengths, we also find weaknesses including unimpressive growth in net income, weak operating cash flow and poor profit margins.

Highlights from TheStreet Ratings analysis on VALU go as follows:

  • 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 Media industry and the overall market, VALUE LINE INC's return on equity exceeds that of both the industry average and the S&P 500.
  • VALU 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. Despite the fact that VALU's debt-to-equity ratio is low, the quick ratio, which is currently 0.65, displays a potential problem in covering short-term cash needs.
  • VALUE LINE INC's earnings per share declined by 35.3% 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, VALUE LINE INC increased its bottom line by earning $0.74 versus $0.69 in the prior year.
  • Net operating cash flow has significantly decreased to -$0.02 million or 101.64% 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 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 Media industry. The net income has significantly decreased by 34.7% when compared to the same quarter one year ago, falling from $1.68 million to $1.10 million.

You can view the full analysis from the report here: Value Line Ratings Report

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China Ceramics ( CCCL) was another company that pushed the Financial Services industry lower today. China Ceramics was down $0.05 (5.0%) to $0.94 on light volume. Throughout the day, 12,902 shares of China Ceramics exchanged hands as compared to its average daily volume of 36,300 shares. The stock ranged in price between $0.94-$0.97 after having opened the day at $0.95 as compared to the previous trading day's close of $0.99.

China Ceramics has a market cap of $20.2 million and is part of the financial sector. Shares are up 22.2% year-to-date as of the close of trading on Tuesday.

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