Mellanox Technologies Ltd. (MLNX): Today's Featured Technology 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 Technology sector lower today making it today's featured Technology laggard. The sector as a whole closed the day down 1.1%. By the end of trading, Mellanox Technologies fell $20.16 (-20.5%) to $77.99 on heavy volume. Throughout the day, 6.9 million shares of Mellanox Technologies exchanged hands as compared to its average daily volume of 1.1 million shares. The stock ranged in price between $75.51-$83.15 after having opened the day at $82.80 as compared to the previous trading day's close of $98.15. Other companies within the Technology sector that declined today were: Recon Technology ( RCON), down 18.9%, Comverse Technology ( CMVT), down 15.5%, B Communications ( BCOM), down 15.1%, and Powerwave Technologies ( PWAV), down 14.3%.
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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 $4.17 billion and is part of the electronics industry. The company has a P/E ratio of 50, below the average electronics industry P/E ratio of 82 and above the S&P 500 P/E ratio of 17.7. Shares are up 202.1% year to date as of the close of trading on Wednesday. Currently there are six 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, SatCon Technology Corporation ( SATC), up 45.1%, A123 Systems ( AONE), up 36.4%, Trunkbow International Holdings ( TBOW), up 16.4%, and Vimicro International Corporation ( VIMC), up 11.6%, were all gainers within the technology sector with America Movil S.A.B. de C.V ( AMX) being today's featured technology sector leader.

For investors not wanting singular stock exposure, ETFs may be of interest. Investors who are bullish on the technology sector could consider Technology Select Sector SPDR ( XLK) while those bearish on the technology sector could consider ProShares Ultra Short Technology ( REW).

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