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3 Stocks Pushing The Electronics 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 Electronics industry as a whole closed the day down 1.3% versus the S&P 500, which was up 0.2%. Laggards within the Electronics industry included Schmitt Industries ( SMIT), down 4.7%, LightPath Technologies ( LPTH), down 1.6%, LGL Group ( LGL), down 7.1%, Aehr Test Systems ( AEHR), down 2.4% and Aetrium ( ATRM), down 2.5%.

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

Aehr Test Systems ( AEHR) is one of the companies that pushed the Electronics industry lower today. Aehr Test Systems was down $0.07 (2.4%) to $2.86 on heavy volume. Throughout the day, 62,067 shares of Aehr Test Systems exchanged hands as compared to its average daily volume of 14,000 shares. The stock ranged in price between $2.81-$2.94 after having opened the day at $2.83 as compared to the previous trading day's close of $2.93.

Aehr Test Systems designs, engineers, develops, manufactures, and sells test and burn-in equipment used in the semiconductor industry worldwide. Aehr Test Systems has a market cap of $30.7 million and is part of the technology sector. Shares are down 3.9% year-to-date as of the close of trading on Tuesday.

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TheStreet Ratings rates Aehr Test Systems as a hold. The company's strengths can be seen in multiple areas, such as its robust revenue growth, largely solid financial position with reasonable debt levels by most measures and impressive record of earnings per share growth. However, as a counter to these strengths, we find that the company's return on equity has been disappointing.

Highlights from TheStreet Ratings analysis on AEHR go as follows:

  • AEHR's very impressive revenue growth greatly exceeded the industry average of 9.7%. Since the same quarter one year prior, revenues leaped by 64.6%. This growth in revenue appears to have trickled down to the company's bottom line, improving the earnings per share.
  • AEHR's debt-to-equity ratio is very low at 0.11 and is currently below that of the industry average, implying that there has been very successful management of debt levels. Along with the favorable debt-to-equity ratio, the company maintains an adequate quick ratio of 1.02, which illustrates the ability to avoid short-term cash problems.
  • The gross profit margin for AEHR TEST SYSTEMS is rather high; currently it is at 54.26%. It has increased significantly from the same period last year. Despite the strong results of the gross profit margin, AEHR's net profit margin of 4.45% significantly trails the industry average.
  • Powered by its strong earnings growth of 125.00% and other important driving factors, this stock has surged by 55.74% over the past year, outperforming the rise in the S&P 500 Index during the same period. Looking ahead, however, we cannot assume that the stock's past performance is going to drive future results. Quite to the contrary, its sharp appreciation over the last year is one of the factors that should prompt investors to seek better opportunities elsewhere.
  • 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. When compared to other companies in the Semiconductors & Semiconductor Equipment industry and the overall market, AEHR TEST SYSTEMS's return on equity is below that of both the industry average and the S&P 500.

You can view the full analysis from the report here: Aehr Test Systems 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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