3 Stocks Pushing The Technology Sector 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 Technology sector as a whole closed the day down 0.9% versus the S&P 500, which was up 0.1%. Laggards within the Technology sector included Video Display ( VIDE), down 2.1%, Qualstar ( QBAK), down 4.8%, TigerLogic ( TIGR), down 2.4%, LGL Group ( LGL), down 2.8% and Net Element ( NETE), down 5.7%.

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

LG Display ( LPL) is one of the companies that pushed the Technology sector lower today. LG Display was down $0.67 (4.8%) to $13.22 on light volume. Throughout the day, 280,737 shares of LG Display exchanged hands as compared to its average daily volume of 479,400 shares. The stock ranged in price between $13.22-$13.32 after having opened the day at $13.32 as compared to the previous trading day's close of $13.89.

LG Display Co., Ltd. manufactures and sells thin film transistor liquid crystal display (TFT-LCD) panels in the Republic of Korea, the United States, Europe, China, and rest of Asia. LG Display has a market cap of $10.0 billion and is part of the electronics industry. Shares are up 14.4% year-to-date as of the close of trading on Thursday. Currently there are 2 analysts who rate LG Display a buy, no analysts rate it a sell, and 2 rate it a hold.

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TheStreet Ratings rates LG Display as a hold. The company's strengths can be seen in multiple areas, such as its increase in stock price during the past year, largely solid financial position with reasonable debt levels by most measures and notable return on equity. However, as a counter to these strengths, we also find weaknesses including unimpressive growth in net income, poor profit margins and weak operating cash flow.

Highlights from TheStreet Ratings analysis on LPL go as follows:

  • The current debt-to-equity ratio, 0.37, is low and is below the industry average, implying that there has been successful management of debt levels. Although the company had a strong debt-to-equity ratio, its quick ratio of 0.82 is somewhat weak and could be cause for future problems.
  • Compared to where it was 12 months ago, the stock is up, but it has so far lagged the appreciation in the S&P 500. Looking ahead, our view is that this company's fundamentals will not have much impact in either direction, allowing the stock to generally move up or down based on the push and pull of the broad market.
  • Net operating cash flow has decreased to $619.25 million or 37.58% when compared to the same quarter last year. In addition, when comparing to the industry average, the firm's growth rate is much lower.
  • 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 74.9% when compared to the same quarter one year ago, falling from $292.25 million to $73.46 million.

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

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At the close, LGL Group ( LGL) was down $0.12 (2.8%) to $4.10 on light volume. Throughout the day, 2,200 shares of LGL Group exchanged hands as compared to its average daily volume of 5,100 shares. The stock ranged in price between $4.10-$4.13 after having opened the day at $4.13 as compared to the previous trading day's close of $4.22.

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 $10.8 million and is part of the electronics industry. Shares are down 22.8% year-to-date as of the close of trading on Thursday.

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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 Technology sector lower today. Qualstar was down $0.06 (4.8%) to $1.20 on heavy volume. Throughout the day, 31,800 shares of Qualstar exchanged hands as compared to its average daily volume of 12,100 shares. The stock ranged in price between $1.20-$1.32 after having opened the day at $1.26 as compared to the previous trading day's close of $1.26.

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 $15.8 million and is part of the electronics industry. Shares are up 11.5% year-to-date as of the close of trading on Thursday.

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.

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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.

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