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 Technology sector as a whole closed the day down 1.0% versus the S&P 500, which was down 0.3%. Laggards within the Technology sector included

UBIC

(

UBIC

), down 3.7%,

GRAVITY

(

GRVY

), down 6.8%,

Intelligent Systems

(

INS

), down 2.6%,

Digital Power

(

DPW

), down 2.9% and

SemiLEDs

(

LEDS

), down 8.1%.

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

China Unicom (Hong Kong

(

CHU

) is one of the companies that pushed the Technology sector lower today. China Unicom (Hong Kong was down $0.29 (2.1%) to $13.80 on average volume. Throughout the day, 658,492 shares of China Unicom (Hong Kong exchanged hands as compared to its average daily volume of 578,100 shares. The stock ranged in price between $13.74-$13.94 after having opened the day at $13.92 as compared to the previous trading day's close of $14.09.

China Unicom (Hong Kong) Limited, an investment holding company, provides telecommunications services in the People's Republic of China. China Unicom (Hong Kong has a market cap of $33.3 billion and is part of the telecommunications industry. Shares are up 4.8% year-to-date as of the close of trading on Friday. Currently there are 2 analysts who rate China Unicom (Hong Kong a buy, no analysts rate it a sell, and 1 rates it a hold.

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TheStreet Ratings rates

China Unicom (Hong Kong

as a

hold

. The company's strengths can be seen in multiple areas, such as its largely solid financial position with reasonable debt levels by most measures, reasonable valuation levels and good cash flow from operations. However, as a counter to these strengths, we also find weaknesses including disappointing return on equity, a generally disappointing performance in the stock itself and poor profit margins.

Highlights from TheStreet Ratings analysis on CHU go as follows:

  • The debt-to-equity ratio is somewhat low, currently at 0.60, and is less than that of the industry average, implying that there has been a relatively successful effort in the management of debt levels.
  • CHINA UNICOM (HONG KONG) LTD's earnings per share declined by 8.7% in the most recent quarter compared to the same quarter a year ago. This company has reported somewhat volatile earnings recently. But, we feel it is poised for EPS growth in the coming year. During the past fiscal year, CHINA UNICOM (HONG KONG) LTD increased its bottom line by earning $0.79 versus $0.71 in the prior year. This year, the market expects an improvement in earnings ($0.84 versus $0.79).
  • Reflecting the weaknesses we have cited, including the decline in the company's earnings per share, CHU has underperformed the S&P 500 Index, declining 20.02% from its price level of one year ago. Turning toward the future, the fact that the stock has come down in price over the past year should not necessarily be interpreted as a negative; it could be one of the factors that may help make the stock attractive down the road. Right now, however, we believe that it is too soon to buy.
  • The company's current return on equity has slightly decreased from the same quarter one year prior. This implies a minor weakness in the organization. In comparison to the other companies in the Diversified Telecommunication Services industry and the overall market, CHINA UNICOM (HONG KONG) LTD's return on equity is significantly below that of the industry average and is below that of the S&P 500.

You can view the full analysis from the report here:

China Unicom (Hong Kong Ratings Report

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At the close,

SemiLEDs

(

LEDS

) was down $0.05 (8.1%) to $0.52 on light volume. Throughout the day, 1,800 shares of SemiLEDs exchanged hands as compared to its average daily volume of 31,200 shares. The stock ranged in price between $0.52-$0.56 after having opened the day at $0.53 as compared to the previous trading day's close of $0.57.

SemiLEDs Corporation develops, manufactures, and sells light emitting diode (LED) chips and LED components. SemiLEDs has a market cap of $16.8 million and is part of the telecommunications industry. Shares are down 48.2% year-to-date as of the close of trading on Friday.

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TheStreet Ratings rates

SemiLEDs

as a

sell

. The company's weaknesses can be seen in multiple areas, such as its poor profit margins and generally disappointing historical performance in the stock itself.

Highlights from TheStreet Ratings analysis on LEDS go as follows:

  • The gross profit margin for SEMILEDS CORP is currently extremely low, coming in at 13.43%. Despite the low profit margin, it has increased significantly from the same period last year. Despite the mixed results of the gross profit margin, LEDS's net profit margin of -86.68% significantly underperformed when compared to the industry average.
  • LEDS'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 36.96%, 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.
  • 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 Semiconductors & Semiconductor Equipment industry and the overall market, SEMILEDS CORP's return on equity significantly trails that of both the industry average and the S&P 500.
  • LEDS, with its decline in revenue, underperformed when compared the industry average of 11.4%. Since the same quarter one year prior, revenues fell by 24.0%. The declining revenue has not hurt the company's bottom line, with increasing earnings per share.
  • LEDS's debt-to-equity ratio is very low at 0.14 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 1.18, which illustrates the ability to avoid short-term cash problems.

You can view the full analysis from the report here:

SemiLEDs Ratings Report

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UBIC

(

UBIC

) was another company that pushed the Technology sector lower today. UBIC was down $0.52 (3.7%) to $13.60 on light volume. Throughout the day, 124 shares of UBIC exchanged hands as compared to its average daily volume of 500 shares. The stock ranged in price between $13.60-$13.60 after having opened the day at $13.60 as compared to the previous trading day's close of $14.12.

UBIC has a market cap of $250.6 million and is part of the telecommunications industry. Shares are up 5.1% year-to-date as of the close of trading on Friday. Currently there is 1 analyst who rates UBIC a buy, no analysts rate it a sell, and none rate it a hold.

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