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 up 0.3% versus the S&P 500, which was down 0.3%. Laggards within the Electronics industry included BTU International ( BTUI), down 10.0%, Nortech Systems ( NSYS), down 1.7%, Orbit International ( ORBT), down 1.7%, Pulse Electronics ( PULS), down 2.5% and LightPath Technologies ( LPTH), down 3.9%.

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

Pulse Electronics ( PULS) is one of the companies that pushed the Electronics industry lower today. Pulse Electronics was down $0.07 (2.5%) to $2.76 on light volume. Throughout the day, 7,943 shares of Pulse Electronics exchanged hands as compared to its average daily volume of 12,600 shares. The stock ranged in price between $2.76-$2.95 after having opened the day at $2.85 as compared to the previous trading day's close of $2.83.

Pulse Electronics Corporation produces and sells precision-engineered electronic components and modules. It operates in three segments: Network, Power, and Wireless. Pulse Electronics has a market cap of $48.9 million and is part of the technology sector. Shares are down 2.1% year-to-date as of the close of trading on Tuesday.

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TheStreet Ratings rates Pulse Electronics as a sell. The company's weaknesses can be seen in multiple areas, such as its unimpressive growth in net income, poor profit margins and generally disappointing historical performance in the stock itself.

Highlights from TheStreet Ratings analysis on PULS 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 Electronic Equipment, Instruments & Components industry. The net income has significantly decreased by 27.1% when compared to the same quarter one year ago, falling from -$7.12 million to -$9.05 million.
  • The gross profit margin for PULSE ELECTRONICS CORP is rather low; currently it is at 23.67%. It has decreased from the same quarter the previous year. Along with this, the net profit margin of -11.07% is significantly below that of the industry average.
  • PULS has underperformed the S&P 500 Index, declining 13.34% 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.
  • PULS, with its decline in revenue, underperformed when compared the industry average of 9.4%. Since the same quarter one year prior, revenues slightly dropped by 3.7%. The declining revenue has not hurt the company's bottom line, with increasing earnings per share.
  • Net operating cash flow has slightly increased to -$2.59 million or 9.89% when compared to the same quarter last year. Despite an increase in cash flow of 9.89%, PULSE ELECTRONICS CORP is still growing at a significantly lower rate than the industry average of 72.71%.

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

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At the close, Orbit International ( ORBT) was down $0.05 (1.7%) to $2.90 on light volume. Throughout the day, 200 shares of Orbit International exchanged hands as compared to its average daily volume of 9,200 shares. The stock ranged in price between $2.90-$2.91 after having opened the day at $2.91 as compared to the previous trading day's close of $2.95.

Orbit International Corp. designs, manufactures, and sells electronic components and subsystems, and commercial and custom power units. The company operates in two segments, Electronics Group and Power Group. Orbit International has a market cap of $13.1 million and is part of the technology sector. Shares are down 13.2% year-to-date as of the close of trading on Tuesday.

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TheStreet Ratings rates Orbit International 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 weak operating cash flow.

Highlights from TheStreet Ratings analysis on ORBT go as follows:

  • ORBIT INTERNATIONAL 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 suffered a declining pattern earnings per share over the past two years. During the past fiscal year, ORBIT INTERNATIONAL CORP reported poor results of -$0.59 versus -$0.03 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 Electrical Equipment industry. The net income has significantly decreased by 1227.5% when compared to the same quarter one year ago, falling from -$0.08 million to -$1.06 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 Electrical Equipment industry and the overall market, ORBIT INTERNATIONAL CORP's return on equity significantly trails that of both the industry average and the S&P 500.
  • The gross profit margin for ORBIT INTERNATIONAL CORP is currently lower than what is desirable, coming in at 34.87%. It has decreased from the same quarter the previous year. Along with this, the net profit margin of -21.21% is significantly below that of the industry average.
  • Net operating cash flow has significantly decreased to -$0.86 million or 161.46% when compared to the same quarter last year. In addition, when comparing to the industry average, the firm's growth rate is much lower.

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

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BTU International ( BTUI) was another company that pushed the Electronics industry lower today. BTU International was down $0.31 (10.0%) to $2.79 on light volume. Throughout the day, 3,254 shares of BTU International exchanged hands as compared to its average daily volume of 4,700 shares. The stock ranged in price between $2.79-$3.03 after having opened the day at $3.03 as compared to the previous trading day's close of $3.10.

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 $29.5 million and is part of the technology sector. Shares are up 3.0% year-to-date as of the close of trading on Tuesday.

TheStreet Ratings rates BTU International as a sell. The company's weaknesses can be seen in multiple areas, such as its disappointing return on equity and weak operating cash flow.

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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.
  • Net operating cash flow has significantly decreased to -$2.70 million or 56.59% when compared to the same quarter last year. In addition, when comparing to the industry average, the firm's growth rate is much lower.
  • 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.
  • 38.34% 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.

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

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