3 Stocks Pushing The Computer Hardware 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 Computer Hardware industry as a whole closed the day down 2.0% versus the S&P 500, which was down 0.5%. Laggards within the Computer Hardware industry included Lantronix ( LTRX), down 6.8%, Dataram ( DRAM), down 2.4%, Astro-Med ( ALOT), down 1.9%, China TechFaith Wireless Comm Tech ( CNTF), down 4.1% and Qumu ( QUMU), down 1.9%.

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

Qumu ( QUMU) is one of the companies that pushed the Computer Hardware industry lower today. Qumu was down $0.28 (1.9%) to $13.96 on light volume. Throughout the day, 5,229 shares of Qumu exchanged hands as compared to its average daily volume of 19,800 shares. The stock ranged in price between $13.96-$14.69 after having opened the day at $14.62 as compared to the previous trading day's close of $14.23.

Qumu Corporation operates in the enterprise video content management software and disc publishing businesses. Qumu has a market cap of $123.6 million and is part of the technology sector. Shares are up 11.2% year-to-date as of the close of trading on Thursday. Currently there is 1 analyst who rates Qumu a buy, no analysts rate it a sell, and none rate it a hold.

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TheStreet Ratings rates Qumu as a sell. The company's weaknesses can be seen in multiple areas, such as its weak operating cash flow and feeble growth in its earnings per share.

Highlights from TheStreet Ratings analysis on QUMU go as follows:

  • Net operating cash flow has significantly decreased to -$4.54 million or 366.01% when compared to the same quarter last year. In addition, when comparing to the industry average, the firm's growth rate is much lower.
  • QUMU CORP's earnings per share improvement from the most recent quarter was slightly positive. The company has demonstrated a pattern of positive earnings per share growth over the past year. However, we anticipate underperformance relative to this pattern in the coming year. During the past fiscal year, QUMU CORP continued to lose money by earning -$1.12 versus -$4.79 in the prior year. For the next year, the market is expecting a contraction of 37.5% in earnings (-$1.54 versus -$1.12).
  • The company, on the basis of net income growth from the same quarter one year ago, has significantly underperformed against the S&P 500 and did not exceed that of the Computers & Peripherals industry. The net income increased by 1.2% when compared to the same quarter one year prior, going from -$3.98 million to -$3.93 million.
  • 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. Compared to other companies in the Computers & Peripherals industry and the overall market, QUMU CORP's return on equity significantly trails that of both the industry average and the S&P 500.
  • 48.39% is the gross profit margin for QUMU CORP which we consider to be strong. Regardless of QUMU's high profit margin, it has managed to decrease from the same period last year. Despite the mixed results of the gross profit margin, QUMU's net profit margin of -20.90% significantly underperformed when compared to the industry average.

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

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At the close, China TechFaith Wireless Comm Tech ( CNTF) was down $0.06 (4.1%) to $1.39 on average volume. Throughout the day, 116,913 shares of China TechFaith Wireless Comm Tech exchanged hands as compared to its average daily volume of 142,600 shares. The stock ranged in price between $1.39-$1.48 after having opened the day at $1.45 as compared to the previous trading day's close of $1.45.

China Techfaith Wireless Communication Technology Limited is engaged in the original design, development, and sale of mobile handsets in the People's Republic of China and internationally. China TechFaith Wireless Comm Tech has a market cap of $76.8 million and is part of the technology sector. Shares are down 13.2% year-to-date as of the close of trading on Thursday.

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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, slightly underperformed the industry average of 2.2%. 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

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Lantronix ( LTRX) was another company that pushed the Computer Hardware industry lower today. Lantronix was down $0.14 (6.8%) to $1.91 on average volume. Throughout the day, 21,409 shares of Lantronix exchanged hands as compared to its average daily volume of 24,300 shares. The stock ranged in price between $1.90-$2.05 after having opened the day at $2.05 as compared to the previous trading day's close of $2.05.

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 $30.1 million and is part of the technology sector. Shares are up 31.0% year-to-date as of the close of trading on Thursday. Currently there is 1 analyst who rates Lantronix a buy, no analysts rate it a sell, and none rate it a hold.

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.

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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.
  • LTRX, with its decline in revenue, slightly underperformed the industry average of 2.5%. 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.
  • Net operating cash flow has significantly increased by 84.49% to -$0.12 million when compared to the same quarter last year. In addition, LANTRONIX INC has also vastly surpassed the industry average cash flow growth rate of -10.86%.
  • 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.

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