Mellanox Technologies Ltd. (MLNX): Today's Featured Electronics Laggard

Editor's Note: TheStreet ratings do not represent the views of TheStreet's staff or its contributors. Ratings are established by computer based on metrics for performance (which includes growth, stock performance, efficiency and valuation) and risk (volatility and solvency). Companies with poor cash flow or high debt levels tend to earn lower ratings in our model.

Mellanox Technologies ( MLNX) pushed the Electronics industry lower today making it today's featured Electronics laggard. The industry as a whole closed the day up 0.8%. By the end of trading, Mellanox Technologies fell $1.04 (-1%) to $101.37 on average volume. Throughout the day, 1.4 million shares of Mellanox Technologies exchanged hands as compared to its average daily volume of 1.2 million shares. The stock ranged in price between $98.52-$103.61 after having opened the day at $103 as compared to the previous trading day's close of $102.41. Other companies within the Electronics industry that declined today were: BTU International ( BTUI), down 7%, Data I/O Corporation ( DAIO), down 6.2%, SatCon Technology Corporation ( SATC), down 4.9%, and On Track Innovations ( OTIV), down 4.6%.
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Mellanox technologies, Ltd., a fabless semiconductor company, produces and supplies interconnect products for computing, storage, and communication applications in the computing, Web 2.0, storage, financial services, database, and cloud markets. Mellanox Technologies has a market cap of $4.23 billion and is part of the technology sector. The company has a P/E ratio of 48.4, below the average electronics industry P/E ratio of 79.4 and above the S&P 500 P/E ratio of 17.7. Shares are up 212.9% year to date as of the close of trading on Tuesday. Currently there are five analysts that rate Mellanox Technologies a buy, no analysts rate it a sell, and two rate it a hold.

TheStreet Ratings rates Mellanox Technologies as a buy. 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, expanding profit margins, good cash flow from operations and compelling growth in net income. We feel these strengths outweigh the fact that the company is trading at a premium valuation based on our review of its current price compared to such things as earnings and book value.

On the positive front, Mindspeed Technologies ( MSPD), up 28.1%, A123 Systems ( AONE), up 24.1%, Enova Systems ( ENA), up 15.7%, and Spire Corporation ( SPIR), up 13.5%, were all gainers within the electronics industry with Broadcom Corporation ( BRCM) being today's featured electronics industry leader.

For investors not wanting singular stock exposure, ETFs may be of interest. Investors who are bullish on the electronics industry could consider iShares Dow Jones US Technology ( IYW) while those bearish on the electronics industry could consider ProShares Ultra Short Semiconductor ( SSG).

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