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3 Stocks Pushing The Computer Hardware Industry Lower

Editor's Note: Any reference to TheStreet Ratings and its underlying recommendation does not reflect the opinion of TheStreet, Inc. or any of its contributors including Jim Cramer or Stephanie Link.

The Computer Hardware industry as a whole closed the day down 0.6% versus the S&P 500, which was down 0.5%. Laggards within the Computer Hardware industry included Acorn Energy ( ACFN), down 5.1%, Mad Catz Interactive ( MCZ), down 4.9%, Hutchinson Technology ( HTCH), down 3.6%, Echelon ( ELON), down 2.4% and China TechFaith Wireless Comm Tech ( CNTF), down 11.8%.

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

Hutchinson Technology ( HTCH) is one of the companies that pushed the Computer Hardware industry lower today. Hutchinson Technology was down $0.08 (3.6%) to $2.14 on average volume. Throughout the day, 257,474 shares of Hutchinson Technology exchanged hands as compared to its average daily volume of 222,500 shares. The stock ranged in price between $2.10-$2.26 after having opened the day at $2.26 as compared to the previous trading day's close of $2.22.

Hutchinson Technology Incorporated researches, designs, develops, manufactures, and supplies suspension assemblies for hard disk drives. The company's suspension assemblies are components in computers, and various consumer electronics and enterprise storage products. Hutchinson Technology has a market cap of $61.2 million and is part of the technology sector. Shares are down 31.9% year-to-date as of the close of trading on Monday. Currently there is 1 analyst who rates Hutchinson Technology a buy, no analysts rate it a sell, and 1 rates it a hold.

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TheStreet Ratings rates Hutchinson Technology as a sell. The company's weaknesses can be seen in multiple areas, such as its deteriorating net income, generally high debt management risk, disappointing return on equity, poor profit margins and weak operating cash flow.

Highlights from TheStreet Ratings analysis on HTCH 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 Computers & Peripherals industry. The net income has significantly decreased by 566.3% when compared to the same quarter one year ago, falling from $1.87 million to -$8.71 million.
  • The debt-to-equity ratio of 1.22 is relatively high when compared with the industry average, suggesting a need for better debt level management. Along with the unfavorable debt-to-equity ratio, HTCH maintains a poor quick ratio of 0.80, which illustrates the inability to avoid short-term cash problems.
  • 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 Computers & Peripherals industry and the overall market, HUTCHINSON TECHNOLOGY INC's return on equity significantly trails that of both the industry average and the S&P 500.
  • The gross profit margin for HUTCHINSON TECHNOLOGY INC is currently lower than what is desirable, coming in at 25.96%. It has decreased from the same quarter the previous year. Along with this, the net profit margin of -14.34% is significantly below that of the industry average.
  • Net operating cash flow has significantly decreased to -$2.19 million or 158.83% when compared to the same quarter last year. In addition, when comparing to the industry average, the firm's growth rate is much lower.

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

STOCKS TO BUY: TheStreet Quant Ratings has identified a handful of stocks that can potentially TRIPLE in the next 12 months. Learn more.

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