Why Indentive Group (INVE) Shares Are Falling Today

NEW YORK (TheStreet) -- Identive Group (INVE) was falling 2.7% to $1.10 Tuesday after it entered into a $20 million term loan and line-of-credit agreement through Opus Banks' Technology Banking Division.

Identiv will use the $20 million to retire existing debt and enhance liquidity. In a press release the company claims it will use the proceeds to "create a stronger financial platform to accelerate growth."

"We are now focusing on delivering trust solutions for the rapidly expanding connected world," Jason Hart, CEO of Identiv, said in a press release. "Our 'Trust Your World' vision is applicable to billions of everyday items that demand to be trusted. We are expanding from a strong base, having shipped product for well over 100 million everyday items in 2013."

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TheStreet Ratings team rates IDENTIVE GROUP INC as a Sell with a ratings score of D. TheStreet Ratings Team has this to say about their recommendation:

"We rate IDENTIVE GROUP INC (INVE) a SELL. This is driven by some concerns, which we believe should have a greater impact than any strengths, and could make it more difficult for investors to achieve positive results compared to most of the stocks we cover. Among the areas we feel are negative, one of the most important has been unimpressive growth in net income over time."

Highlights from the analysis by TheStreet Ratings Team goes 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 Electronic Equipment, Instruments & Components industry. The net income has significantly decreased by 1781.3% when compared to the same quarter one year ago, falling from $0.18 million to -$2.98 million.
  • This stock's share value has moved by only 32.44% over the past year. 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 return on equity has improved slightly when compared to the same quarter one year prior. This can be construed as a modest strength in the organization. Compared to other companies in the Electronic Equipment, Instruments & Components industry and the overall market, IDENTIVE GROUP INC's return on equity significantly trails that of both the industry average and the S&P 500.
  • IDENTIVE GROUP INC's earnings have gone downhill when comparing its most recently reported quarter with the same quarter a year earlier. 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, IDENTIVE GROUP INC continued to lose money by earning -$0.36 versus -$0.84 in the prior year.
  • INVE, with its decline in revenue, underperformed when compared the industry average of 1.8%. Since the same quarter one year prior, revenues fell by 25.1%. The declining revenue appears to have seeped down to the company's bottom line, decreasing earnings per share.
  • You can view the full analysis from the report here: INVE Ratings Report

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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.

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