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.

The Computer Hardware industry as a whole closed the day down 0.6% versus the S&P 500, which was down 0.2%. Laggards within the Computer Hardware industry included

Echelon

(

ELON

), down 8.4%,

Interphase

(

INPH

), down 8.3%,

Crossroads Systems

(

CRDS

), down 3.7%,

Dataram

(

DRAM

), down 3.5% and

Hutchinson Technology

(

HTCH

), down 5.7%.

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

Crossroads Systems

(

CRDS

) is one of the companies that pushed the Computer Hardware industry lower today. Crossroads Systems was down $0.05 (3.7%) to $1.27 on average volume. Throughout the day, 81,577 shares of Crossroads Systems exchanged hands as compared to its average daily volume of 72,000 shares. The stock ranged in price between $1.23-$1.32 after having opened the day at $1.29 as compared to the previous trading day's close of $1.32.

Crossroads Systems, Inc. provides data protection solutions and services worldwide. Crossroads Systems has a market cap of $25.6 million and is part of the technology sector. Shares are down 47.2% year-to-date as of the close of trading on Monday. Currently there are 2 analysts who rate Crossroads Systems a buy, no analysts rate it a sell, and none rate it a hold.

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TheStreet Ratings rates

Crossroads Systems

as a

sell

. The company's weaknesses can be seen in multiple areas, such as its unimpressive growth in net income, generally high debt management risk, disappointing return on equity, weak operating cash flow and generally disappointing historical performance in the stock itself.

Highlights from TheStreet Ratings analysis on CRDS 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 102.0% when compared to the same quarter one year ago, falling from -$1.74 million to -$3.52 million.
  • The debt-to-equity ratio is very high at 4.41 and currently higher than the industry average, implying increased risk associated with the management of debt levels within the company. Along with the unfavorable debt-to-equity ratio, CRDS maintains a poor quick ratio of 0.98, 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, CROSSROADS SYSTEMS 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 -$2.28 million or 81.47% when compared to the same quarter last year. In addition, when comparing to the industry average, the firm's growth rate is much lower.
  • Despite any intermediate fluctuations, we have only bad news to report on this stock's performance over the last year: it has tumbled by 51.53%, worse than the S&P 500's performance. Consistent with the plunge in the stock price, the company's earnings per share are down 35.71% 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:

Crossroads Systems Ratings Report

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At the close,

Interphase

(

INPH

) was down $0.04 (8.3%) to $0.42 on light volume. Throughout the day, 8,920 shares of Interphase exchanged hands as compared to its average daily volume of 132,100 shares. The stock ranged in price between $0.40-$0.47 after having opened the day at $0.47 as compared to the previous trading day's close of $0.46.

Interphase Corporation, an information and communications technology company, provides embedded computing solutions, engineering design services, and contract manufacturing services in North America, the Pacific Rim, and Europe. Interphase has a market cap of $4.0 million and is part of the technology sector. Shares are down 79.8% year-to-date as of the close of trading on Monday.

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TheStreet Ratings rates

Interphase

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 poor profit margins.

Highlights from TheStreet Ratings analysis on INPH go as follows:

  • INTERPHASE CORP's earnings per share declined by 28.6% 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, INTERPHASE CORP reported poor results of -$0.68 versus -$0.39 in the prior year.
  • The company, on the basis of change in net income from the same quarter one year ago, has significantly underperformed against the S&P 500 and did not exceed that of the Communications Equipment industry. The net income has significantly decreased by 48.5% when compared to the same quarter one year ago, falling from -$1.02 million to -$1.51 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 Communications Equipment industry and the overall market, INTERPHASE CORP'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 -$1.30 million or 68.66% 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.
  • The gross profit margin for INTERPHASE CORP is currently lower than what is desirable, coming in at 34.58%. Regardless of INPH's low profit margin, it has managed to increase from the same period last year. Despite the mixed results of the gross profit margin, INPH's net profit margin of -72.58% significantly underperformed when compared to the industry average.

You can view the full analysis from the report here:

Interphase Ratings Report

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Echelon

(

ELON

) was another company that pushed the Computer Hardware industry lower today. Echelon was down $0.04 (8.4%) to $0.49 on average volume. Throughout the day, 123,999 shares of Echelon exchanged hands as compared to its average daily volume of 87,800 shares. The stock ranged in price between $0.49-$0.56 after having opened the day at $0.53 as compared to the previous trading day's close of $0.54.

Echelon Corporation develops and markets energy control networking platforms. Its products enable everyday devices, including air conditioners, appliances, electricity meters, light switches, thermostats, and valves to be inter-connected. Echelon has a market cap of $26.4 million and is part of the technology sector. Shares are down 68.5% year-to-date as of the close of trading on Monday.

TheStreet Ratings rates

Echelon

as a

sell

. The company's weaknesses can be seen in multiple areas, such as its 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 ELON 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 Electronic Equipment, Instruments & Components industry and the overall market, ECHELON CORP'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 -$2.35 million or 65.23% when compared to the same quarter last year. In addition, when comparing to the industry average, the firm's growth rate is much lower.
  • ELON'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 72.49%, 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.
  • ELON, with its decline in revenue, slightly underperformed the industry average of 2.8%. Since the same quarter one year prior, revenues slightly dropped by 9.7%. The declining revenue has not hurt the company's bottom line, with increasing earnings per share.
  • The gross profit margin for ECHELON CORP is rather high; currently it is at 63.08%. Regardless of ELON's high profit margin, it has managed to decrease from the same period last year. Despite the mixed results of the gross profit margin, ELON's net profit margin of -14.43% significantly underperformed when compared to the industry average.

You can view the full analysis from the report here:

Echelon Ratings Report

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