3 Internet Stocks Moving The Industry Upward

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 three major indices are trading lower today with the Dow Jones Industrial Average ( ^DJI) trading up 13 points (0.1%) at 16,969 as of Wednesday, July 2, 2014, 3:55 PM ET. The NYSE advances/declines ratio sits at 1,178 issues advancing vs. 1,877 declining with 123 unchanged.

The Internet industry as a whole was unchanged today versus the S&P 500, which was unchanged. Top gainers within the Internet industry included Professional Diversity Network ( IPDN), up 3.2%, Selectica ( SLTC), up 3.8%, BroadVision ( BVSN), up 1.7%, ClickSoftware Technologies ( CKSW), up 3.6% and Points International ( PCOM), up 2.3%.

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

ClickSoftware Technologies ( CKSW) is one of the companies that pushed the Internet industry higher today. ClickSoftware Technologies was up $0.31 (3.6%) to $8.90 on heavy volume. Throughout the day, 318,248 shares of ClickSoftware Technologies exchanged hands as compared to its average daily volume of 100,700 shares. The stock ranged in a price between $8.61-$9.11 after having opened the day at $8.79 as compared to the previous trading day's close of $8.59.

ClickSoftware Technologies Ltd. provides software products and solutions for workforce management and optimization for mobile and in-house resources primarily in North America, Europe, Israel, and the Asia Pacific region. ClickSoftware Technologies has a market cap of $262.2 million and is part of the technology sector. Shares are up 14.5% year-to-date as of the close of trading on Tuesday. Currently there are 3 analysts who rate ClickSoftware Technologies 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 ClickSoftware Technologies as a sell. The company's weaknesses can be seen in multiple areas, such as its deteriorating net income, disappointing return on equity, weak operating cash flow and feeble growth in its earnings per share.

Highlights from TheStreet Ratings analysis on CKSW 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 Software industry. The net income has significantly decreased by 2398.8% when compared to the same quarter one year ago, falling from $0.09 million to -$1.95 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 Software industry and the overall market, CLICKSOFTWARE TECHNOLOGIES's return on equity significantly trails that of both the industry average and the S&P 500.
  • Net operating cash flow has declined marginally to $3.73 million or 0.53% when compared to the same quarter last year. In addition, when comparing the cash generation rate to the industry average, the firm's growth is significantly lower.
  • CLICKSOFTWARE TECHNOLOGIES's earnings have gone downhill when comparing its most recently reported quarter with the same quarter a year earlier. 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, CLICKSOFTWARE TECHNOLOGIES swung to a loss, reporting -$0.13 versus $0.23 in the prior year. This year, the market expects an improvement in earnings ($0.07 versus -$0.13).
  • This stock's share value has moved by only 9.32% over the past year. Turning toward the future, the fact that the stock has come down in price over the past year should not necessarily be interpreted as a negative; it could be one of the factors that may help make the stock attractive down the road. Right now, however, we believe that it is too soon to buy.

You can view the full analysis from the report here: ClickSoftware Technologies 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, Selectica ( SLTC) was up $0.24 (3.8%) to $6.36 on light volume. Throughout the day, 3,611 shares of Selectica exchanged hands as compared to its average daily volume of 7,400 shares. The stock ranged in a price between $6.25-$6.36 after having opened the day at $6.25 as compared to the previous trading day's close of $6.12.

Selectica, Inc. provides cloud-based software solutions for companies in the United States, Canada, India, New Zealand, Switzerland, and the United Kingdom. Selectica has a market cap of $35.3 million and is part of the technology sector. Shares are down 4.5% year-to-date as of the close of trading on Tuesday. Currently there is 1 analyst who rates Selectica 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 Selectica as a sell. The company's weaknesses can be seen in multiple areas, such as its deteriorating net income, poor profit margins, weak operating cash flow, generally high debt management risk and generally disappointing historical performance in the stock itself.

Highlights from TheStreet Ratings analysis on SLTC 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 Software & Services industry. The net income has significantly decreased by 51.4% when compared to the same quarter one year ago, falling from -$2.09 million to -$3.17 million.
  • The gross profit margin for SELECTICA INC is currently lower than what is desirable, coming in at 34.43%. It has decreased significantly from the same period last year. Along with this, the net profit margin of -89.46% is significantly below that of the industry average.
  • Net operating cash flow has significantly decreased to -$1.68 million or 168.83% 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 debt-to-equity ratio of 1.03 is relatively high when compared with the industry average, suggesting a need for better debt level management. Even though the debt-to-equity ratio is weak, SLTC's quick ratio is somewhat strong at 1.38, demonstrating the ability to handle short-term liquidity needs.
  • SLTC's stock share price has done very poorly compared to where it was a year ago: Despite any rallies, the net result is that it is down by 34.89%, which is also worse that the performance of the S&P 500 Index. Investors have so far failed to pay much attention to the earnings improvements the company has managed to achieve over the last quarter. Naturally, the overall market trend is bound to be a significant factor. However, in one sense, the stock's sharp decline last year is a positive for future investors, making it cheaper (in proportion to its earnings over the past year) than most other stocks in its industry. But due to other concerns, we feel the stock is still not a good buy right now.

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

Professional Diversity Network ( IPDN) was another company that pushed the Internet industry higher today. Professional Diversity Network was up $0.13 (3.2%) to $4.20 on heavy volume. Throughout the day, 13,546 shares of Professional Diversity Network exchanged hands as compared to its average daily volume of 4,600 shares. The stock ranged in a price between $3.99-$4.20 after having opened the day at $3.99 as compared to the previous trading day's close of $4.07.

Professional Diversity Network, Inc. operates online professional networking communities with career resources in the United States. Professional Diversity Network has a market cap of $25.7 million and is part of the technology sector. Shares are down 11.7% year-to-date as of the close of trading on Tuesday. Currently there is 1 analyst who rates Professional Diversity Network a buy, no analysts rate it a sell, and none rate it a hold.

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

Highlights from TheStreet Ratings analysis on IPDN 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 Internet Software & Services industry and the overall market, PROFESSIONAL DIVERSITY NETWK'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 -$0.35 million or 138.51% when compared to the same quarter last year. In addition, when comparing to the industry average, the firm's growth rate is much lower.
  • In its most recent trading session, IPDN 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. 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.
  • The gross profit margin for PROFESSIONAL DIVERSITY NETWK is currently very high, coming in at 70.44%. Regardless of IPDN's high profit margin, it has managed to decrease from the same period last year. Despite the mixed results of the gross profit margin, IPDN's net profit margin of -21.24% significantly underperformed when compared to the industry average.
  • PROFESSIONAL DIVERSITY NETWK reported significant earnings per share improvement in the most recent quarter compared to the same quarter a year ago. This company has reported somewhat volatile earnings recently. But, we feel it is poised for EPS growth in the coming year. During the past fiscal year, PROFESSIONAL DIVERSITY NETWK swung to a loss, reporting -$0.23 versus $0.27 in the prior year. This year, the market expects an improvement in earnings (-$0.19 versus -$0.23).

You can view the full analysis from the report here: Professional Diversity Network 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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