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 1.5% versus the S&P 500, which was down 0.5%. Laggards within the Technology sector included Professional Diversity Network ( IPDN), down 6.4%, Cover-All Technologies ( COVR), down 2.5%, Bio-Rad Laboratories ( BIO.B), down 1.6%, Pulse Electronics ( PULS), down 4.4% and Aehr Test Systems ( AEHR), down 1.6%.

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

Pulse Electronics ( PULS) is one of the companies that pushed the Technology sector lower today. Pulse Electronics was down $0.12 (4.4%) to $2.60 on average volume. Throughout the day, 8,569 shares of Pulse Electronics exchanged hands as compared to its average daily volume of 10,200 shares. The stock ranged in price between $2.58-$2.78 after having opened the day at $2.77 as compared to the previous trading day's close of $2.72.

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 $46.8 million and is part of the telecommunications industry. Shares are down 5.9% year-to-date as of the close of trading on Thursday.

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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 10.28% 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 9.0%. 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 69.38%.

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

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At the close, Cover-All Technologies ( COVR) was down $0.03 (2.5%) to $1.16 on light volume. Throughout the day, 11,674 shares of Cover-All Technologies exchanged hands as compared to its average daily volume of 17,200 shares. The stock ranged in price between $1.14-$1.18 after having opened the day at $1.16 as compared to the previous trading day's close of $1.19.

Cover-All Technologies Inc., through its subsidiary, Cover-All Systems, Inc., licenses and maintains software products for the property/casualty insurance industry in the United States and Puerto Rico. Cover-All Technologies has a market cap of $31.7 million and is part of the telecommunications industry. Shares are down 15.0% year-to-date as of the close of trading on Thursday.

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TheStreet Ratings rates Cover-All Technologies as a sell. The company's weaknesses can be seen in multiple areas, such as its deteriorating net income, disappointing return on equity and generally disappointing historical performance in the stock itself.

Highlights from TheStreet Ratings analysis on COVR 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 38.4% when compared to the same quarter one year ago, falling from $0.71 million to $0.43 million.
  • Current return on equity is lower than its ROE from the same quarter one year prior. This is a clear sign of weakness within the company. Compared to other companies in the Software industry and the overall market, COVER-ALL TECHNOLOGIES INC's return on equity significantly trails that of both the industry average and the S&P 500.
  • The share price of COVER-ALL TECHNOLOGIES INC has not done very well: it is down 11.02% 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.
  • COVER-ALL TECHNOLOGIES INC's earnings per share declined by 33.3% 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, COVER-ALL TECHNOLOGIES INC continued to lose money by earning -$0.10 versus -$0.20 in the prior year.
  • The revenue fell significantly faster than the industry average of 7.9%. Since the same quarter one year prior, revenues fell by 24.4%. The declining revenue appears to have seeped down to the company's bottom line, decreasing earnings per share.

You can view the full analysis from the report here: Cover-All Technologies Ratings Report

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Professional Diversity Network ( IPDN) was another company that pushed the Technology sector lower today. Professional Diversity Network was down $0.27 (6.4%) to $3.93 on light volume. Throughout the day, 128 shares of Professional Diversity Network exchanged hands as compared to its average daily volume of 4,600 shares. The stock ranged in price between $3.93-$3.93 after having opened the day at $3.93 as compared to the previous trading day's close of $4.20.

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 telecommunications industry. Shares are down 8.9% year-to-date as of the close of trading on Thursday. 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 and weak operating cash flow.

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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. 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 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.

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