3 Stocks Pushing The Computer Software & Services Industry Lower

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The Computer Software & Services industry as a whole closed the day down 1.9% versus the S&P 500, which was down 0.7%. Laggards within the Computer Software & Services industry included TigerLogic ( TIGR), down 5.7%, Formula Systems (1985 ( FORTY), down 4.2%, MGT Capital Investments ( MGT), down 2.4%, QAD ( QADB), down 2.9% and PAR Technology ( PAR), down 2.4%.

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

Wipro ( WIT) is one of the companies that pushed the Computer Software & Services industry lower today. Wipro was down $0.22 (1.8%) to $12.10 on light volume. Throughout the day, 376,424 shares of Wipro exchanged hands as compared to its average daily volume of 695,000 shares. The stock ranged in price between $12.06-$12.14 after having opened the day at $12.14 as compared to the previous trading day's close of $12.32.

Wipro Limited provides information technology (IT) products and services worldwide. It operates in two segments, IT Services and IT Products. Wipro has a market cap of $30.1 billion and is part of the technology sector. Shares are down 2.1% year-to-date as of the close of trading on Monday. Currently there are no analysts who rate Wipro a buy, 1 analyst rates it a sell, and 5 rate it a hold.

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TheStreet Ratings rates Wipro as a buy. The company's strengths can be seen in multiple areas, such as its revenue growth, largely solid financial position with reasonable debt levels by most measures, impressive record of earnings per share growth, increase in net income and reasonable valuation levels. Although no company is perfect, currently we do not see any significant weaknesses which are likely to detract from the generally positive outlook.

Highlights from TheStreet Ratings analysis on WIT go as follows:

  • The revenue growth greatly exceeded the industry average of 16.1%. Since the same quarter one year prior, revenues rose by 17.4%. This growth in revenue appears to have trickled down to the company's bottom line, improving the earnings per share.
  • WIT's debt-to-equity ratio is very low at 0.15 and is currently below that of the industry average, implying that there has been very successful management of debt levels. To add to this, WIT has a quick ratio of 2.06, which demonstrates the ability of the company to cover short-term liquidity needs.
  • WIPRO LTD has improved earnings per share by 49.5% in the most recent quarter compared to the same quarter a year ago. The company has demonstrated a pattern of positive earnings per share growth over the past two years. We feel that this trend should continue. During the past fiscal year, WIPRO LTD increased its bottom line by earning $0.53 versus $0.41 in the prior year. This year, the market expects an improvement in earnings ($0.57 versus $0.53).
  • The net income growth from the same quarter one year ago has significantly exceeded that of the IT Services industry average, but is less than that of the S&P 500. The net income increased by 23.9% when compared to the same quarter one year prior, going from $322.65 million to $399.85 million.

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

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At the close, PAR Technology ( PAR) was down $0.10 (2.4%) to $4.00 on average volume. Throughout the day, 13,991 shares of PAR Technology exchanged hands as compared to its average daily volume of 13,500 shares. The stock ranged in price between $3.81-$4.13 after having opened the day at $4.03 as compared to the previous trading day's close of $4.10.

PAR Technology Corporation, through its subsidiaries, primarily provides technology solutions to businesses and organizations in the hospitality industry worldwide. The company operates in two segments: Hospitality and Government. PAR Technology has a market cap of $65.9 million and is part of the technology sector. Shares are down 24.8% year-to-date as of the close of trading on Monday.

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TheStreet Ratings rates PAR Technology as a sell. The company's weaknesses can be seen in multiple areas, such as its unimpressive growth in net income, relatively poor performance when compared with the S&P 500 during the past year and poor profit margins.

Highlights from TheStreet Ratings analysis on PAR 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 157.6% when compared to the same quarter one year ago, falling from -$0.38 million to -$0.99 million.
  • In its most recent trading session, PAR 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. We feel that the combination of its price rise over the last year and its current price-to-earnings ratio relative to its industry tend to reduce its upside potential.
  • The gross profit margin for PAR TECHNOLOGY CORP is rather low; currently it is at 22.71%. Regardless of PAR's low profit margin, it has managed to increase from the same period last year. Despite the mixed results of the gross profit margin, the net profit margin of -1.74% trails the industry average.
  • 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 Electronic Equipment, Instruments & Components industry and the overall market, PAR TECHNOLOGY CORP's return on equity significantly trails that of both the industry average and the S&P 500.
  • PAR TECHNOLOGY 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. 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, PAR TECHNOLOGY CORP turned its bottom line around by earning $0.05 versus -$0.11 in the prior year.

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

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QAD ( QADB) was another company that pushed the Computer Software & Services industry lower today. QAD was down $0.50 (2.9%) to $17.05 on light volume. Throughout the day, 350 shares of QAD exchanged hands as compared to its average daily volume of 3,000 shares. The stock ranged in price between $17.02-$17.05 after having opened the day at $17.02 as compared to the previous trading day's close of $17.55.

QAD Inc. provides enterprise software solutions for manufacturers in the automotive, consumer products, food and beverage, high technology, industrial products, and life sciences industries Worldwide. QAD has a market cap of $55.6 million and is part of the technology sector. Shares are up 9.6% year-to-date as of the close of trading on Monday. Currently there is 1 analyst who rates QAD a buy, no analysts rate it a sell, and none rate it a hold.

TheStreet Ratings rates QAD as a buy. The company's strengths can be seen in multiple areas, such as its revenue growth, solid stock price performance, attractive valuation levels, compelling growth in net income and expanding profit margins. We feel these strengths outweigh the fact that the company shows weak operating cash flow.

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Highlights from TheStreet Ratings analysis on QADB go as follows:

  • QADB's revenue growth has slightly outpaced the industry average of 7.9%. Since the same quarter one year prior, revenues rose by 10.6%. This growth in revenue appears to have trickled down to the company's bottom line, improving the earnings per share.
  • Powered by its strong earnings growth of 100.00% and other important driving factors, this stock has surged by 63.21% over the past year, outperforming the rise in the S&P 500 Index during the same period. Turning to the future, naturally, any stock can fall in a major bear market. However, in almost any other environment, the stock should continue to move higher despite the fact that it has already enjoyed nice gains in the past year.
  • The net income growth from the same quarter one year ago has significantly exceeded that of the S&P 500 and the Software industry. The net income increased by 94.0% when compared to the same quarter one year prior, rising from -$1.26 million to -$0.08 million.
  • The gross profit margin for QAD INC is rather high; currently it is at 55.91%. 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 -0.11% is in-line with the industry average.

You can view the full analysis from the report here: QAD 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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