KLA-Tencor Corporation (KLAC): 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.

KLA-Tencor Corporation ( KLAC) pushed the Electronics industry lower today making it today's featured Electronics laggard. The industry as a whole closed the day up 0.4%. By the end of trading, KLA-Tencor Corporation fell 65 cents (-1.4%) to $44.90 on average volume. Throughout the day, 2.8 million shares of KLA-Tencor Corporation exchanged hands as compared to its average daily volume of 2.2 million shares. The stock ranged in price between $44.88-$45.75 after having opened the day at $45.62 as compared to the previous trading day's close of $45.55. Other companies within the Electronics industry that declined today were: Aetrium Incorporated ( ATRM), down 13.8%, Aehr Test Systems ( AEHR), down 8.7%, Digital Power Corporation ( DPW), down 7.1%, and Data I/O Corporation ( DAIO), down 6.7%.
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KLA-Tencor Corporation designs, manufactures, and markets process control and yield management solutions for the semiconductor and related nanoelectronics industries. KLA-Tencor Corporation has a market cap of $7.75 billion and is part of the technology sector. The company has a P/E ratio of 10.5, equal to the average electronics industry P/E ratio and below the S&P 500 P/E ratio of 17.7. Shares are down 5.6% year to date as of the close of trading on Wednesday. Currently there are eight analysts that rate KLA-Tencor Corporation a buy, three analysts rate it a sell, and two rate it a hold.

TheStreet Ratings rates KLA-Tencor Corporation as a buy. The company's strengths can be seen in multiple areas, such as its largely solid financial position with reasonable debt levels by most measures, attractive valuation levels, increase in stock price during the past year, expanding profit margins and increase in net income. We feel these strengths outweigh the fact that the company shows weak operating cash flow.

On the positive front, Nexxus Lighting ( NEXS), up 9.2%, Advanced Photonix ( API), up 9.2%, Dynasil Corporation of America ( DYSL), up 8.4%, and Memsic ( MEMS), up 7.8%, were all gainers within the electronics industry with Mellanox Technologies ( MLNX) 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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