3 Stocks Pushing The Electronics Industry Lower

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.

The Electronics industry as a whole closed the day down 0.7% versus the S&P 500, which was up 0.6%. Laggards within the Electronics industry included BTU International ( BTUI), down 3.8%, Wells-Gardner Electronic ( WGA), down 2.3%, MRV Communications ( MRVC), down 2.0%, Mocon ( MOCO), down 1.8% and CSR ( CSRE), down 2.4%.

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

CSR ( CSRE) is one of the companies that pushed the Electronics industry lower today. CSR was down $0.90 (2.4%) to $36.81 on average volume. Throughout the day, 3,921 shares of CSR exchanged hands as compared to its average daily volume of 3,800 shares. The stock ranged in price between $36.56-$37.05 after having opened the day at $36.93 as compared to the previous trading day's close of $37.71.

CSR plc, a fabless semiconductor company, designs and develops semiconductor integrated circuits primarily in Asia, the Americas, and Europe. CSR has a market cap of $1.6 billion and is part of the technology sector. Shares are down 9.5% year-to-date as of the close of trading on Tuesday. Currently there are 2 analysts who rate CSR a buy, no analysts rate it a sell, and none rate it a hold.

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TheStreet Ratings rates CSR 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, good cash flow from operations and expanding profit margins. However, as a counter to these strengths, we also find weaknesses including deteriorating net income, disappointing return on equity and feeble growth in the company's earnings per share.

Highlights from TheStreet Ratings analysis on CSRE go as follows:

  • CSRE's debt-to-equity ratio is very low at 0.00 and is currently below that of the industry average, implying that there has been very successful management of debt levels. To add to this, CSRE has a quick ratio of 1.86, which demonstrates the ability of the company to cover short-term liquidity needs.
  • Net operating cash flow has significantly increased by 78.32% to $37.25 million when compared to the same quarter last year. In addition, CSR PLC has also vastly surpassed the industry average cash flow growth rate of 3.16%.
  • Compared to where it was a year ago today, the stock is now trading at a higher level, regardless of the company's weak earnings results. Despite the fact that it has already risen in the past year, there is currently no conclusive evidence that warrants the purchase or sale of this stock.
  • 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 Semiconductors & Semiconductor Equipment industry. The net income has significantly decreased by 217.6% when compared to the same quarter one year ago, falling from $64.65 million to -$76.06 million.
  • Return on equity has greatly decreased when compared to its ROE from the same quarter one year prior. This is a signal of major weakness within the corporation. Compared to other companies in the Semiconductors & Semiconductor Equipment industry and the overall market, CSR PLC's return on equity significantly trails that of both the industry average and the S&P 500.

You can view the full analysis from the report here: CSR Ratings Report

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At the close, MRV Communications ( MRVC) was down $0.24 (2.0%) to $12.00 on average volume. Throughout the day, 9,542 shares of MRV Communications exchanged hands as compared to its average daily volume of 7,100 shares. The stock ranged in price between $11.88-$12.00 after having opened the day at $12.00 as compared to the previous trading day's close of $12.24.

MRV Communications, Inc. MRV Communications has a market cap of $88.2 million and is part of the technology sector. Shares are unchanged year-to-date as of the close of trading on Tuesday.

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TheStreet Ratings rates MRV Communications as a sell. The company's weaknesses can be seen in multiple areas, such as its deteriorating net income, disappointing return on equity and poor profit margins.

Highlights from TheStreet Ratings analysis on MRVC go 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 Communications Equipment industry. The net income has significantly decreased by 119.2% when compared to the same quarter one year ago, falling from $6.49 million to -$1.25 million.
  • 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. Compared to other companies in the Communications Equipment industry and the overall market, MRV COMMUNICATIONS INC's return on equity significantly trails that of both the industry average and the S&P 500.
  • The gross profit margin for MRV COMMUNICATIONS INC is currently lower than what is desirable, coming in at 33.83%. Regardless of MRVC's low profit margin, it has managed to increase from the same period last year. Despite the mixed results of the gross profit margin, MRVC's net profit margin of -2.46% significantly underperformed when compared to the industry average.
  • MRV COMMUNICATIONS INC reported significant earnings per share improvement in the most recent quarter compared to the same quarter a year ago. The company has demonstrated a pattern of positive earnings per share growth over the past year. During the past fiscal year, MRV COMMUNICATIONS INC continued to lose money by earning -$0.91 versus -$0.94 in the prior year.
  • This stock has increased by 33.33% over the past year, outperforming the rise in the S&P 500 Index during the same period. Regarding the future course of this stock, we feel that the risks involved in investing in MRVC do not compensate for any future upside potential, despite the fact that it has seen nice gains over the past 12 months.

You can view the full analysis from the report here: MRV Communications Ratings Report

STOCKS TO BUY: TheStreet Quant Ratings has identified a handful of stocks that can potentially TRIPLE in the next 12 months. Learn more.

BTU International ( BTUI) was another company that pushed the Electronics industry lower today. BTU International was down $0.10 (3.8%) to $2.55 on light volume. Throughout the day, 6,165 shares of BTU International exchanged hands as compared to its average daily volume of 9,500 shares. The stock ranged in price between $2.46-$2.66 after having opened the day at $2.60 as compared to the previous trading day's close of $2.65.

BTU International, Inc. designs, manufactures, sells, and services thermal processing equipment and related process controls for use in the electronics, alternative energy, automotive, and other industries worldwide. BTU International has a market cap of $26.2 million and is part of the technology sector. Shares are down 9.0% year-to-date as of the close of trading on Tuesday.

TheStreet Ratings rates BTU International as a sell. Among the areas we feel are negative, one of the most important has been an overall disappointing return on equity.

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Highlights from TheStreet Ratings analysis on BTUI go as follows:

  • Return on equity has greatly decreased when compared to its ROE from the same quarter one year prior. This is a signal of major weakness within the corporation. Compared to other companies in the Semiconductors & Semiconductor Equipment industry and the overall market, BTU INTERNATIONAL INC's return on equity significantly trails that of both the industry average and the S&P 500.
  • BTU INTERNATIONAL INC has improved earnings per share by 42.4% in the most recent quarter compared to the same quarter a year ago. 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, BTU INTERNATIONAL INC reported poor results of -$1.21 versus -$1.16 in the prior year.
  • Despite currently having a low debt-to-equity ratio of 0.44, it is higher than that of the industry average, inferring that management of debt levels may need to be evaluated further. Despite the fact that BTUI's debt-to-equity ratio is mixed in its results, the company's quick ratio of 1.72 is high and demonstrates strong liquidity.
  • 35.59% is the gross profit margin for BTU INTERNATIONAL INC which we consider to be strong. It has increased from the same quarter the previous year. Regardless of the strong results of the gross profit margin, the net profit margin of -15.28% is in-line with the industry average.
  • Compared to where it was a year ago today, the stock is now trading at a higher level, and has traded in line with the S&P 500. Turning our attention to the future direction of the stock, we do not believe this stock offers ample reward opportunity to compensate for the risks, despite the fact that it rose over the past year.

You can view the full analysis from the report here: BTU International Ratings Report

STOCKS TO BUY: TheStreet Quant Ratings has identified a handful of stocks that can potentially TRIPLE in the next 12 months. Learn more.

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