3 Stocks Pushing The Services Sector Lower

The Services sector as a whole closed the day down 1.0% versus the S&P 500, which was down 0.9%. Laggards within the Services sector included Alon Blue Square Israel ( BSI), down 6.7%, Radio One ( ROIA), down 4.5%, Spar Group ( SGRP), down 9.5%, VirtualScopics ( VSCP), down 3.1% and Globus Maritime ( GLBS), down 9.6%.

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

VirtualScopics ( VSCP) is one of the companies that pushed the Services sector lower today. VirtualScopics was down $0.07 (3.1%) to $2.19 on average volume. Throughout the day, 3,904 shares of VirtualScopics exchanged hands as compared to its average daily volume of 3,300 shares. The stock ranged in price between $2.19-$2.25 after having opened the day at $2.22 as compared to the previous trading day's close of $2.26.

VirtualScopics, Inc. provides imaging solutions to the pharmaceutical, biotechnology, and medical device industries. VirtualScopics has a market cap of $6.9 million and is part of the media industry. Shares are down 28.7% year-to-date as of the close of trading on Tuesday. Currently there is 1 analyst who rates VirtualScopics a buy, no analysts rate it a sell, and none rate it a hold.

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

Highlights from TheStreet Ratings analysis on VSCP 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 Life Sciences Tools & Services industry and the overall market, VIRTUALSCOPICS INC's return on equity significantly trails that of both the industry average and the S&P 500.
  • The gross profit margin for VIRTUALSCOPICS INC is currently lower than what is desirable, coming in at 33.41%. It has decreased from the same quarter the previous year. Along with this, the net profit margin of -18.11% is significantly below that of the industry average.
  • VSCP'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 33.69%, 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.
  • The company, on the basis of net income growth from the same quarter one year ago, has significantly underperformed compared to the Life Sciences Tools & Services industry average, but is greater than that of the S&P 500. The net income increased by 25.3% when compared to the same quarter one year prior, rising from -$0.73 million to -$0.55 million.
  • VIRTUALSCOPICS INC has improved earnings per share by 23.1% 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, VIRTUALSCOPICS INC reported poor results of -$1.20 versus -$1.02 in the prior year.

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

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At the close, Spar Group ( SGRP) was down $0.13 (9.5%) to $1.24 on heavy volume. Throughout the day, 16,653 shares of Spar Group exchanged hands as compared to its average daily volume of 4,400 shares. The stock ranged in price between $1.21-$1.32 after having opened the day at $1.26 as compared to the previous trading day's close of $1.37.

SPAR Group Inc., together with its subsidiaries, provides merchandising and marketing services worldwide. Spar Group has a market cap of $26.3 million and is part of the media industry. Shares are down 2.1% year-to-date as of the close of trading on Tuesday.

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TheStreet Ratings rates Spar Group as a hold. The company's strengths can be seen in multiple areas, such as its compelling growth in net income, revenue growth and largely solid financial position with reasonable debt levels by most measures. However, as a counter to these strengths, we also find weaknesses including weak operating cash flow, poor profit margins and a generally disappointing performance in the stock itself.

Highlights from TheStreet Ratings analysis on SGRP go as follows:

  • The net income growth from the same quarter one year ago has significantly exceeded that of the S&P 500 and the Media industry. The net income increased by 79.9% when compared to the same quarter one year prior, rising from -$0.37 million to -$0.07 million.
  • Despite its growing revenue, the company underperformed as compared with the industry average of 6.6%. Since the same quarter one year prior, revenues slightly increased by 4.4%. This growth in revenue appears to have trickled down to the company's bottom line, improving the earnings per share.
  • SPAR GROUP INC reported significant earnings per share improvement in the most recent quarter compared to the same quarter a year ago. Stable Earnings per share over the past year indicate the company has sound management over its earnings and share float. During the past fiscal year, SPAR GROUP INC's EPS of $0.15 remained unchanged from the prior years' EPS of $0.15.
  • The gross profit margin for SPAR GROUP INC is rather low; currently it is at 23.62%. Regardless of SGRP's low profit margin, it has managed to increase from the same period last year. Despite the mixed results of the gross profit margin, SGRP's net profit margin of -0.25% significantly underperformed when compared to the industry average.
  • Net operating cash flow has decreased to $1.44 million or 41.66% when compared to the same quarter last year. In addition, when comparing the cash generation rate to the industry average, the firm's growth is significantly lower.

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

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Radio One ( ROIA) was another company that pushed the Services sector lower today. Radio One was down $0.12 (4.5%) to $2.53 on light volume. Throughout the day, 800 shares of Radio One exchanged hands as compared to its average daily volume of 2,300 shares. The stock ranged in price between $2.49-$2.66 after having opened the day at $2.66 as compared to the previous trading day's close of $2.65.

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 $5.5 million and is part of the media industry. Shares are up 61.5% year-to-date as of the close of trading on Tuesday.

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 17.01% 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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