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 Internet industry as a whole closed the day down 1.7% versus the S&P 500, which was down 1.6%. Laggards within the Internet industry included

LookSmart

(

LOOK

), down 7.6%,

SMTP

(

SMTP

), down 11.2%,

Selectica

(

SLTC

), down 1.8%,

CafePress

(

PRSS

), down 1.9% and

Sify Technologies

(

SIFY

), down 8.2%.

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

Selectica

(

SLTC

) is one of the companies that pushed the Internet industry lower today. Selectica was down $0.11 (1.8%) to $6.00 on light volume. Throughout the day, 3,704 shares of Selectica exchanged hands as compared to its average daily volume of 13,900 shares. The stock ranged in price between $5.84-$6.02 after having opened the day at $5.84 as compared to the previous trading day's close of $6.11.

Selectica, Inc. provides cloud-based software solutions for companies in the United States, Canada, India, New Zealand, Switzerland, and the United Kingdom. Selectica has a market cap of $37.2 million and is part of the services sector. Shares are down 10.1% year-to-date as of the close of trading on Friday. Currently there is 1 analyst who rates Selectica a buy, no analysts rate it a sell, and none rate it a hold.

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

TheStreet Ratings rates

Selectica

as a

sell

. The company's weaknesses can be seen in multiple areas, such as its deteriorating net income and generally high debt management risk.

Highlights from TheStreet Ratings analysis on SLTC 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 Internet Software & Services industry. The net income has decreased by 21.8% when compared to the same quarter one year ago, dropping from -$2.42 million to -$2.95 million.
  • The debt-to-equity ratio of 1.34 is relatively high when compared with the industry average, suggesting a need for better debt level management. Even though the debt-to-equity ratio is weak, SLTC's quick ratio is somewhat strong at 1.16, demonstrating the ability to handle short-term liquidity needs.
  • 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. Compared to other companies in the Internet Software & Services industry and the overall market, SELECTICA INC's return on equity significantly trails that of both the industry average and the S&P 500.
  • 42.85% is the gross profit margin for SELECTICA INC which we consider to be strong. Despite the high profit margin, it has decreased significantly from the same period last year. Despite the mixed results of the gross profit margin, SLTC's net profit margin of -78.36% significantly underperformed when compared to the industry average.
  • The revenue fell significantly faster than the industry average of 27.9%. Since the same quarter one year prior, revenues fell by 13.9%. The declining revenue has not hurt the company's bottom line, with increasing earnings per share.

You can view the full analysis from the report here:

Selectica 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.

At the close,

SMTP

(

SMTP

) was down $0.69 (11.2%) to $5.49 on heavy volume. Throughout the day, 80,630 shares of SMTP exchanged hands as compared to its average daily volume of 12,200 shares. The stock ranged in price between $5.33-$6.20 after having opened the day at $6.18 as compared to the previous trading day's close of $6.18.

SMTP, Inc. provides Internet-based services to facilitate email delivery worldwide. It offers services to enable businesses of various scales to outsource the sending of outbound emails. SMTP has a market cap of $32.6 million and is part of the services sector. Shares are up 332.2% year-to-date as of the close of trading on Friday.

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

TheStreet Ratings rates

SMTP

as a

buy

. The company's strengths can be seen in multiple areas, such as its revenue growth, largely solid financial position with reasonable debt levels by most measures, reasonable valuation levels, solid stock price performance and expanding profit margins. We feel these strengths outweigh the fact that the company has had sub par growth in net income.

Highlights from TheStreet Ratings analysis on SMTP go as follows:

  • SMTP's revenue growth trails the industry average of 27.9%. Since the same quarter one year prior, revenues slightly increased by 6.1%. 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.
  • SMTP has no debt to speak of therefore resulting in a debt-to-equity ratio of zero, which we consider to be a relatively favorable sign. Along with this, the company maintains a quick ratio of 23.62, which clearly demonstrates the ability to cover short-term cash needs.
  • Compared to where it was a year ago today, the stock is now trading at a higher level, regardless of the company's weak earnings results. Turning our attention to the future direction of the stock, it goes without saying that even the best stocks can fall in an overall down market. However, in any other environment, this stock still has good upside potential despite the fact that it has already risen in the past year.
  • SMTP INC 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. 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, SMTP INC increased its bottom line by earning $0.42 versus $0.35 in the prior year.

You can view the full analysis from the report here:

SMTP 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.

LookSmart

(

LOOK

) was another company that pushed the Internet industry lower today. LookSmart was down $0.10 (7.6%) to $1.22 on light volume. Throughout the day, 14,110 shares of LookSmart exchanged hands as compared to its average daily volume of 30,600 shares. The stock ranged in price between $1.20-$1.32 after having opened the day at $1.32 as compared to the previous trading day's close of $1.32.

LookSmart, Ltd. provides search and display advertising network solutions in the United States, Europe, the Middle East, and Africa. LookSmart has a market cap of $8.2 million and is part of the services sector. Shares are down 30.2% year-to-date as of the close of trading on Friday.

TheStreet Ratings rates

LookSmart

as a

sell

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

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

Highlights from TheStreet Ratings analysis on LOOK 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 Internet Software & Services industry. The net income has significantly decreased by 83.7% when compared to the same quarter one year ago, falling from -$1.01 million to -$1.86 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 Internet Software & Services industry and the overall market, LOOKSMART 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 -$1.06 million or 69.77% 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 34.41%, worse than the S&P 500's performance. Consistent with the plunge in the stock price, the company's earnings per share are down 77.77% 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.
  • LOOKSMART 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. 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, LOOKSMART LTD continued to lose money by earning -$0.93 versus -$1.92 in the prior year.

You can view the full analysis from the report here:

LookSmart 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.