3 Stocks Pushing The Computer Hardware Industry Higher

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 are trading down today with the Dow Jones Industrial Average ( ^DJI) trading down 42.32 points (-0.3%) at 16,633 as of Wednesday, May 28, 2014, 4:20 PM ET. The NYSE advances/declines ratio sits at 1,597 issues advancing vs. 1,466 declining with 135 unchanged.

The Computer Hardware industry as a whole closed the day down 0.3% versus the S&P 500, which was down 0.1%. Top gainers within the Computer Hardware industry included Crossroads Systems ( CRDS), up 6.0%, Lantronix ( LTRX), up 2.7%, China TechFaith Wireless Comm Tech ( CNTF), up 3.1% and Violin Memory ( VMEM), up 4.0%.

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

China TechFaith Wireless Comm Tech ( CNTF) is one of the companies that pushed the Computer Hardware industry higher today. China TechFaith Wireless Comm Tech was up $0.04 (3.1%) to $1.33 on light volume. Throughout the day, 224,504 shares of China TechFaith Wireless Comm Tech exchanged hands as compared to its average daily volume of 365,400 shares. The stock ranged in a price between $1.25-$1.37 after having opened the day at $1.29 as compared to the previous trading day's close of $1.29.

China Techfaith Wireless Communication Technology Limited engages in the original design, development, and sale of handsets. China TechFaith Wireless Comm Tech has a market cap of $77.3 million and is part of the technology sector. Shares are down 12.6% year-to-date as of the close of trading on Tuesday. Currently there are no analysts who rate China TechFaith Wireless Comm Tech a buy, no analysts rate it a sell, and none rate it a hold.

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TheStreet Ratings rates China TechFaith Wireless Comm Tech 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 CNTF 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 Computers & Peripherals industry. The net income has significantly decreased by 1045.4% when compared to the same quarter one year ago, falling from $0.31 million to -$2.89 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 Computers & Peripherals industry and the overall market, CHINA TECHFAITH WIRELESS-ADR's return on equity significantly trails that of both the industry average and the S&P 500.
  • The gross profit margin for CHINA TECHFAITH WIRELESS-ADR is currently extremely low, coming in at 9.49%. It has decreased from the same quarter the previous year. Along with this, the net profit margin of -10.80% is significantly below that of the industry average.
  • CNTF, with its decline in revenue, underperformed when compared the industry average of 4.3%. Since the same quarter one year prior, revenues slightly dropped by 6.2%. The declining revenue appears to have seeped down to the company's bottom line, decreasing earnings per share.
  • CHINA TECHFAITH WIRELESS-ADR 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. Stable Earnings per share over the past year indicate the company has sound management over its earnings and share float. During the past fiscal year, CHINA TECHFAITH WIRELESS-ADR continued to lose money by earning -$0.05 versus -$0.06 in the prior year.

You can view the full analysis from the report here: China TechFaith Wireless Comm Tech 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.

At the close, Lantronix ( LTRX) was up $0.05 (2.7%) to $1.93 on light volume. Throughout the day, 28,039 shares of Lantronix exchanged hands as compared to its average daily volume of 124,000 shares. The stock ranged in a price between $1.85-$2.00 after having opened the day at $1.90 as compared to the previous trading day's close of $1.88.

Lantronix, Inc. designs, develops, markets, and sells networking and communications products with a focus on the convergence of mobility with machine-to-machine systems. The company provides solutions that enable machines, devices, and sensors to be securely accessed, managed, and controlled. Lantronix has a market cap of $26.6 million and is part of the technology sector. Shares are up 15.7% year-to-date as of the close of trading on Tuesday. Currently there is 1 analyst who rates Lantronix 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 Lantronix as a sell. Among the areas we feel are negative, one of the most important has been an overall disappointing return on equity.

Highlights from TheStreet Ratings analysis on LTRX go as follows:

  • 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, LANTRONIX INC's return on equity significantly trails that of both the industry average and the S&P 500.
  • In its most recent trading session, LTRX has closed at a price level that was not very different from its closing price of one year earlier. This is probably due to its weak earnings growth as well as other mixed factors. 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.
  • LTRX, with its decline in revenue, slightly underperformed the industry average of 2.3%. Since the same quarter one year prior, revenues slightly dropped by 4.7%. The declining revenue has not hurt the company's bottom line, with increasing earnings per share.
  • The gross profit margin for LANTRONIX INC is rather high; currently it is at 51.94%. 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 -1.12% is in-line with the industry average.
  • LTRX'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. Along with the favorable debt-to-equity ratio, the company maintains an adequate quick ratio of 1.07, which illustrates the ability to avoid short-term cash problems.

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

Crossroads Systems ( CRDS) was another company that pushed the Computer Hardware industry higher today. Crossroads Systems was up $0.14 (6.0%) to $2.47 on heavy volume. Throughout the day, 151,160 shares of Crossroads Systems exchanged hands as compared to its average daily volume of 92,900 shares. The stock ranged in a price between $2.35-$2.50 after having opened the day at $2.35 as compared to the previous trading day's close of $2.33.

Crossroads Systems has a market cap of $27.7 million and is part of the technology sector. Shares are down 10.8% year-to-date as of the close of trading on Tuesday.

Highlights from TheStreet Ratings analysis on CRDS go as follows:

You can view the full analysis from the report here: Crossroads Systems 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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