3 Stocks Advancing The Electronics Industry

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.

All three major indices traded up today with the Dow Jones Industrial Average ( ^DJI) trading up 69 points (0.4%) at 16,675 as of Tuesday, May 27, 2014, 3:55 PM ET. The NYSE advances/declines ratio sits at 1,940 issues advancing vs. 1,055 declining with 160 unchanged.

The Electronics industry as a whole closed the day up 1.4% versus the S&P 500, which was up 0.6%. Top gainers within the Electronics industry included Qualstar ( QBAK), up 4.9%, LGL Group ( LGL), up 3.9%, Sutron ( STRN), up 10.8%, Advanced Photonix ( API), up 8.2% and Aehr Test Systems ( AEHR), up 8.5%.

TheStreet Ratings Group would like to highlight 3 stocks pushing the industry higher today:

Sutron ( STRN) is one of the companies that pushed the Electronics industry higher today. Sutron was up $0.50 (10.8%) to $5.15 on heavy volume. Throughout the day, 22,175 shares of Sutron exchanged hands as compared to its average daily volume of 5,600 shares. The stock ranged in a price between $4.65-$5.19 after having opened the day at $4.65 as compared to the previous trading day's close of $4.65.

Sutron Corporation provides real-time data collection and control products, systems and applications software, and professional services for the hydrological, meteorological, and oceanic monitoring markets. Sutron has a market cap of $23.6 million and is part of the technology sector. Shares are down 9.5% year-to-date as of the close of trading on Friday. Currently there are no analysts who rate Sutron a buy, no analysts rate it a sell, and none rate it a hold.

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TheStreet Ratings rates Sutron 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 a generally disappointing performance in the stock itself, feeble growth in the company's earnings per share and deteriorating net income.

Highlights from TheStreet Ratings analysis on STRN go as follows:

  • STRN has no debt to speak of therefore resulting in a debt-to-equity ratio of zero, which we consider to be a relatively favorable sign. Along with this, the company maintains a quick ratio of 2.71, which clearly demonstrates the ability to cover short-term cash needs.
  • Net operating cash flow has significantly increased by 105.48% to $0.11 million when compared to the same quarter last year. The firm also exceeded the industry average cash flow growth rate of 74.82%.
  • The revenue fell significantly faster than the industry average of 6.1%. Since the same quarter one year prior, revenues fell by 24.1%. Weakness in the company's revenue seems to have hurt the bottom line, decreasing earnings per share.
  • SUTRON CORP has experienced a steep decline in earnings per share in the most recent quarter in comparison to its performance from the same quarter a year ago. The company has reported a trend of declining earnings per share over the past two years. During the past fiscal year, SUTRON CORP reported lower earnings of $0.16 versus $0.23 in the prior year.
  • 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 2056.7% when compared to the same quarter one year ago, falling from $0.03 million to -$0.59 million.

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

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At the close, LGL Group ( LGL) was up $0.16 (3.9%) to $4.18 on average volume. Throughout the day, 6,392 shares of LGL Group exchanged hands as compared to its average daily volume of 5,300 shares. The stock ranged in a price between $4.10-$4.34 after having opened the day at $4.34 as compared to the previous trading day's close of $4.02.

The LGL Group, Inc., through its subsidiaries, designs, manufactures, and markets standard and custom-engineered electronic components in the United States and internationally. LGL Group has a market cap of $10.4 million and is part of the technology sector. Shares are down 25.7% year-to-date as of the close of trading on Friday. Currently there are no analysts who rate LGL Group a buy, no analysts rate it a sell, and none rate it a hold.

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

TheStreet Ratings rates LGL Group as a sell. The company's weaknesses can be seen in multiple areas, such as its feeble growth in its earnings per share, deteriorating net income, disappointing return on equity, poor profit margins and generally disappointing historical performance in the stock itself.

Highlights from TheStreet Ratings analysis on LGL go as follows:

  • LGL GROUP INC has experienced a steep decline in earnings per share in the most recent quarter in comparison to its performance from the same quarter a year ago. The company has reported a trend of declining earnings per share over the past two years. During the past fiscal year, LGL GROUP INC reported poor results of -$3.16 versus -$0.51 in the prior year.
  • 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 874.7% when compared to the same quarter one year ago, falling from -$0.08 million to -$0.81 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 Electronic Equipment, Instruments & Components industry and the overall market, LGL GROUP INC's return on equity significantly trails that of both the industry average and the S&P 500.
  • The gross profit margin for LGL GROUP INC is currently lower than what is desirable, coming in at 29.86%. It has decreased from the same quarter the previous year. Along with this, the net profit margin of -13.19% is significantly below that of the industry average.
  • The share price of LGL GROUP INC has not done very well: it is down 24.73% and has underperformed the S&P 500, in part reflecting the company's sharply declining earnings per share when compared to the year-earlier quarter. The fact that the stock is now selling for less than others in its industry in relation to its current earnings is not reason enough to justify a buy rating at this time.

You can view the full analysis from the report here: LGL Group 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.

Qualstar ( QBAK) was another company that pushed the Electronics industry higher today. Qualstar was up $0.06 (4.9%) to $1.30 on average volume. Throughout the day, 11,567 shares of Qualstar exchanged hands as compared to its average daily volume of 13,700 shares. The stock ranged in a price between $1.23-$1.32 after having opened the day at $1.23 as compared to the previous trading day's close of $1.24.

Qualstar Corporation designs, develops, manufactures, and sells power supplies and data storage systems worldwide. The company operates in two segments, Power Supplies and Tape Libraries. Qualstar has a market cap of $15.2 million and is part of the technology sector. Shares are up 9.7% year-to-date as of the close of trading on Friday. Currently there are no analysts who rate Qualstar a buy, no analysts rate it a sell, and none rate it a hold.

TheStreet Ratings rates Qualstar as a sell. The company's weaknesses can be seen in multiple areas, such as its disappointing return on equity and generally disappointing historical performance in the stock itself.

Highlights from TheStreet Ratings analysis on QBAK 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 Computers & Peripherals industry and the overall market, QUALSTAR CORP's return on equity significantly trails that of both the industry average and the S&P 500.
  • QBAK has underperformed the S&P 500 Index, declining 20.99% from its price level of one year ago. The fact that the stock is now selling for less than others in its industry in relation to its current earnings is not reason enough to justify a buy rating at this time.
  • QUALSTAR CORP reported significant earnings per share improvement 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, QUALSTAR CORP reported poor results of -$0.85 versus -$0.35 in the prior year.
  • 45.17% is the gross profit margin for QUALSTAR CORP 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 -7.29% is in-line with the industry average.
  • Net operating cash flow has increased to -$1.40 million or 14.57% when compared to the same quarter last year. In addition, QUALSTAR CORP has also modestly surpassed the industry average cash flow growth rate of 7.77%.

You can view the full analysis from the report here: Qualstar 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.

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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