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The Internet industry as a whole closed the day down 1.1% versus the S&P 500, which was unchanged. Laggards within the Internet industry included ChinaNet Online Holdings ( CNET), down 4.3%, eLong ( LONG), down 2.1%, Tucows ( TCX), down 1.5%, Rediff.com India ( REDF), down 7.3% and Sify Technologies ( SIFY), down 2.9%.

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

Tucows ( TCX) is one of the companies that pushed the Internet industry lower today. Tucows was down $0.21 (1.5%) to $13.50 on average volume. Throughout the day, 34,551 shares of Tucows exchanged hands as compared to its average daily volume of 27,100 shares. The stock ranged in price between $13.29-$13.71 after having opened the day at $13.65 as compared to the previous trading day's close of $13.71.

Tucows Inc. distributes Internet services primarily in North America and Europe. Tucows has a market cap of $152.7 million and is part of the technology sector. Shares are down 2.7% year-to-date as of the close of trading on Friday. Currently there is 1 analyst who rates Tucows a buy, no analysts rate it a sell, and none rate it a hold.

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TheStreet Ratings rates Tucows as a buy. The company's strengths can be seen in multiple areas, such as its compelling growth in net income, revenue growth, notable return on equity, largely solid financial position with reasonable debt levels by most measures and solid stock price performance. We feel these strengths outweigh the fact that the company shows weak operating cash flow.

Highlights from TheStreet Ratings analysis on TCX go as follows:

  • The net income growth from the same quarter one year ago has significantly exceeded that of the S&P 500 and the Internet Software & Services industry. The net income increased by 519.5% when compared to the same quarter one year prior, rising from $0.08 million to $0.48 million.
  • Despite its growing revenue, the company underperformed as compared with the industry average of 21.3%. Since the same quarter one year prior, revenues rose by 14.7%. This growth in revenue appears to have trickled down to the company's bottom line, improving the earnings per share.
  • 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 Internet Software & Services industry and the overall market, TUCOWS INC's return on equity exceeds that of both the industry average and the S&P 500.
  • Although TCX's debt-to-equity ratio of 0.20 is very low, it is currently higher than that of the industry average. Even though the company has a strong debt-to-equity ratio, the quick ratio of 0.28 is very weak and demonstrates a lack of ability to pay short-term obligations.
  • This stock has managed to rise its share value by 89.27% over the past twelve months. Looking ahead, the stock's sharp rise over the last year has already helped drive it to a level which is relatively expensive compared to the rest of its industry. We feel, however, that other strengths this company displays justify these higher price levels.

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

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At the close, eLong ( LONG) was down $0.30 (2.1%) to $14.05 on light volume. Throughout the day, 13,370 shares of eLong exchanged hands as compared to its average daily volume of 22,000 shares. The stock ranged in price between $14.00-$14.40 after having opened the day at $14.31 as compared to the previous trading day's close of $14.35.

eLong, Inc. operates as an online travel service provider in the People's Republic of China. eLong has a market cap of $510.7 million and is part of the technology sector. Shares are down 29.9% year-to-date as of the close of trading on Friday. Currently there is 1 analyst who rates eLong a buy, no analysts rate it a sell, and none rate it a hold.

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TheStreet Ratings rates eLong as a sell. The company's weaknesses can be seen in multiple areas, such as its deteriorating net income, disappointing return on equity and feeble growth in its earnings per share.

Highlights from TheStreet Ratings analysis on LONG 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 Internet & Catalog Retail industry. The net income has significantly decreased by 1375.8% when compared to the same quarter one year ago, falling from $0.45 million to -$5.69 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 Internet & Catalog Retail industry and the overall market, ELONG INC's return on equity significantly trails that of both the industry average and the S&P 500.
  • ELONG 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. However, the consensus estimate suggests that this trend should reverse in the coming year. During the past fiscal year, ELONG INC reported poor results of -$0.80 versus $0.00 in the prior year. This year, the market expects an improvement in earnings ($0.07 versus -$0.80).
  • In its most recent trading session, LONG 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.
  • The gross profit margin for ELONG INC is currently very high, coming in at 76.56%. Regardless of LONG's high profit margin, it has managed to decrease from the same period last year. Despite the mixed results of the gross profit margin, LONG's net profit margin of -14.37% significantly underperformed when compared to the industry average.

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

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ChinaNet Online Holdings ( CNET) was another company that pushed the Internet industry lower today. ChinaNet Online Holdings was down $0.04 (4.3%) to $0.89 on light volume. Throughout the day, 51,656 shares of ChinaNet Online Holdings exchanged hands as compared to its average daily volume of 125,600 shares. The stock ranged in price between $0.87-$1.02 after having opened the day at $1.00 as compared to the previous trading day's close of $0.93.

ChinaNet Online Holdings, Inc., through its subsidiaries, provides business-to-businesses Internet services for small and medium enterprises (SMEs) sales networks in the People's Republic of China. ChinaNet Online Holdings has a market cap of $21.3 million and is part of the technology sector. Shares are up 13.1% year-to-date as of the close of trading on Friday.

TheStreet Ratings rates ChinaNet Online Holdings as a hold. The company's strengths can be seen in multiple areas, such as its solid stock price performance, largely solid financial position with reasonable debt levels by most measures and attractive valuation levels. However, as a counter to these strengths, we find that the growth in the company's earnings per share has not been good.

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Highlights from TheStreet Ratings analysis on CNET go as follows:

  • Compared to its closing price of one year ago, CNET's share price has jumped by 69.28%, exceeding the performance of the broader market during that same time frame. Regarding the stock's future course, our hold rating indicates that we do not recommend additional investment in this stock despite its gains in the past year.
  • CNET's debt-to-equity ratio is very low at 0.02 and is currently below that of the industry average, implying that there has been very successful management of debt levels. To add to this, CNET has a quick ratio of 1.75, which demonstrates the ability of the company to cover short-term liquidity needs.
  • The revenue fell significantly faster than the industry average of 14.9%. Since the same quarter one year prior, revenues fell by 27.3%. Weakness in the company's revenue seems to not be hurting the bottom line, shown by stable earnings per share.
  • The company's current return on equity greatly increased when compared to its ROE from the same quarter one year prior. This is a signal of significant strength within the corporation. When compared to other companies in the Media industry and the overall market, CHINANET ONLINE HOLDINGS's return on equity is below that of both the industry average and the S&P 500.
  • CHINANET ONLINE HOLDINGS reported flat earnings per share in the most recent quarter. The company has reported a trend of declining earnings per share over the past two years. During the past fiscal year, CHINANET ONLINE HOLDINGS reported lower earnings of $0.13 versus $0.15 in the prior year.

You can view the full analysis from the report here: ChinaNet Online Holdings 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.