3 Stocks Pushing The Services Sector Lower

The Services sector as a whole closed the day down 2.5% versus the S&P 500, which was down 1.3%. Laggards within the Services sector included Discovery Communications ( DISCB), down 5.3%, Alon Blue Square Israel ( BSI), down 4.7%, QKL Stores ( QKLS), down 3.6%, Globus Maritime ( GLBS), down 5.3% and VirtualScopics ( VSCP), down 1.8%.

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

Globus Maritime ( GLBS) is one of the companies that pushed the Services sector lower today. Globus Maritime was down $0.06 (5.3%) to $1.07 on average volume. Throughout the day, 7,426 shares of Globus Maritime exchanged hands as compared to its average daily volume of 6,200 shares. The stock ranged in price between $1.07-$1.15 after having opened the day at $1.15 as compared to the previous trading day's close of $1.13.

Globus Maritime Limited, an integrated dry bulk shipping company, provides marine transportation services worldwide. It owns, operates, and manages a fleet of dry bulk vessels that transport iron ore, coal, grain, steel products, cement, alumina, and other dry bulk cargoes. Globus Maritime has a market cap of $12.8 million and is part of the media industry. Shares are down 52.9% year-to-date as of the close of trading on Wednesday.

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TheStreet Ratings rates Globus Maritime as a sell. The company's weaknesses can be seen in multiple areas, such as its feeble growth in its earnings per share, deteriorating net income, disappointing return on equity, weak operating cash flow and generally disappointing historical performance in the stock itself.

Highlights from TheStreet Ratings analysis on GLBS go as follows:

  • GLOBUS MARITIME LTD 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. The company has suffered a declining pattern earnings per share over the past two years. During the past fiscal year, GLOBUS MARITIME LTD reported lower earnings of $0.29 versus $0.52 in the prior year.
  • 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 Marine industry. The net income has significantly decreased by 405.3% when compared to the same quarter one year ago, falling from $1.08 million to -$3.30 million.
  • 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 Marine industry and the overall market, GLOBUS MARITIME LTD'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 $0.32 million or 88.78% when compared to the same quarter last year. In conjunction, when comparing current results to the industry average, GLOBUS MARITIME LTD has marginally lower results.
  • Despite any intermediate fluctuations, we have only bad news to report on this stock's performance over the last year: it has tumbled by 66.88%, worse than the S&P 500's performance. Consistent with the plunge in the stock price, the company's earnings per share are down 409.09% 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.

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

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At the close, QKL Stores ( QKLS) was down $0.06 (3.6%) to $1.60 on average volume. Throughout the day, 3,549 shares of QKL Stores exchanged hands as compared to its average daily volume of 4,100 shares. The stock ranged in price between $1.60-$1.65 after having opened the day at $1.65 as compared to the previous trading day's close of $1.66.

QKL Stores Inc., together with its subsidiaries, operates a supermarket chain in northeastern China and Inner Mongolia. QKL Stores has a market cap of $2.5 million and is part of the media industry. Shares are down 14.9% year-to-date as of the close of trading on Wednesday.

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TheStreet Ratings rates QKL Stores as a sell. The company's weaknesses can be seen in multiple areas, such as its feeble growth in its earnings per share, deteriorating net income, generally high debt management risk, disappointing return on equity and poor profit margins.

Highlights from TheStreet Ratings analysis on QKLS go as follows:

  • The debt-to-equity ratio is very high at 4.53 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 0.36, 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 Food & Staples Retailing industry and the overall market, QKL STORES INC's return on equity significantly trails that of both the industry average and the S&P 500.
  • The gross profit margin for QKL STORES INC is rather low; currently it is at 16.06%. It has decreased from the same quarter the previous year. Along with this, the net profit margin of -8.04% is significantly below that of the industry average.
  • Net operating cash flow has significantly decreased to -$7.74 million or 457.08% when compared to the same quarter last year. In addition, when comparing to the industry average, the firm's growth rate is much lower.
  • QKL STORES INC's earnings per share declined by 20.6% in the most recent quarter compared to the same quarter a year ago. The company has suffered a declining pattern earnings per share over the past two years. During the past fiscal year, QKL STORES INC reported poor results of -$17.71 versus -$9.23 in the prior year.

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

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Discovery Communications ( DISCB) was another company that pushed the Services sector lower today. Discovery Communications was down $1.56 (5.3%) to $28.00 on heavy volume. Throughout the day, 525 shares of Discovery Communications exchanged hands as compared to its average daily volume of 100 shares. The stock ranged in price between $27.99-$29.50 after having opened the day at $29.50 as compared to the previous trading day's close of $29.56.

Discovery Communications, Inc. operates as a media company. The company operates through U.S. Networks; International Networks; and Education and Other segments. Discovery Communications has a market cap of $193.3 million and is part of the media industry. Shares are down 20.1% year-to-date as of the close of trading on Wednesday. Currently there are no analysts who rate Discovery Communications a buy, no analysts rate it a sell, and 1 rates it a hold.

TheStreet Ratings rates Discovery Communications as a buy. The company's strengths can be seen in multiple areas, such as its revenue growth, attractive valuation levels, expanding profit margins, good cash flow from operations and largely solid financial position with reasonable debt levels by most measures. We feel its strengths outweigh the fact that the company has had sub par growth in net income.

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Highlights from TheStreet Ratings analysis on DISCB go as follows:

  • 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 2.7%. This growth in revenue does not appear to have trickled down to the company's bottom line, displayed by a decline in earnings per share.
  • The gross profit margin for DISCOVERY COMMUNICATIONS INC is currently very high, coming in at 89.66%. It has increased from the same quarter the previous year. Along with this, the net profit margin of 17.29% is above that of the industry average.
  • Net operating cash flow has increased to $331.00 million or 42.67% when compared to the same quarter last year. The firm also exceeded the industry average cash flow growth rate of 7.92%.
  • Even though the current debt-to-equity ratio is 1.31, it is still below the industry average, suggesting that this level of debt is acceptable within the Media industry. Regardless of the somewhat mixed results with the debt-to-equity ratio, the company's quick ratio of 1.10 is sturdy.

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

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