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 0.7% versus the S&P 500, which was down 0.4%. Laggards within the Technology sector included Schmitt Industries ( SMIT), down 2.8%, CounterPath ( CPAH), down 8.7%, Wells-Gardner Electronic ( WGA), down 3.1%, Optical Cable ( OCC), down 1.7% and GSE Systems ( GVP), down 1.8%.

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

Nippon Telegraph & Telephone ( NTT) is one of the companies that pushed the Technology sector lower today. Nippon Telegraph & Telephone was down $0.57 (1.8%) to $31.61 on heavy volume. Throughout the day, 544,187 shares of Nippon Telegraph & Telephone exchanged hands as compared to its average daily volume of 283,200 shares. The stock ranged in price between $31.43-$31.69 after having opened the day at $31.56 as compared to the previous trading day's close of $32.18.

Nippon Telegraph and Telephone Corporation, together with its subsidiaries, provides fixed and mobile voice related services, IP/packet communications services, telecommunications equipment, and system integration and other telecommunications-related services in Japan. Nippon Telegraph & Telephone has a market cap of $70.7 billion and is part of the telecommunications industry. Shares are up 19.0% year-to-date as of the close of trading on Wednesday. Currently there is 1 analyst who rates Nippon Telegraph & Telephone a buy, no analysts rate it a sell, and none rate it a hold.

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TheStreet Ratings rates Nippon Telegraph & Telephone 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, solid stock price performance, growth in earnings per share and increase in net income. 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 NTT go as follows:

  • The revenue growth greatly exceeded the industry average of 3.3%. Since the same quarter one year prior, revenues rose by 34.4%. Growth in the company's revenue appears to have helped boost the earnings per share.
  • The current debt-to-equity ratio, 0.50, is low and is below the industry average, implying that there has been successful management of debt levels. Along with the favorable debt-to-equity ratio, the company maintains an adequate quick ratio of 1.04, which illustrates the ability to avoid short-term cash problems.
  • Compared to where it was a year ago today, the stock is now trading at a higher level, reflecting both the market's overall trend during that period and the fact that the company's earnings growth has been robust. Turning our attention to the future direction of the stock, it goes without saying that even the best stocks can fall in an overall down market. However, in any other environment, this stock still has good upside potential despite the fact that it has already risen in the past year.
  • NIPPON TELEGRAPH & TELEPHONE reported significant earnings per share improvement 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, NIPPON TELEGRAPH & TELEPHONE increased its bottom line by earning $2.47 versus $2.29 in the prior year. This year, the market expects an improvement in earnings ($2.60 versus $2.47).
  • The net income growth from the same quarter one year ago has significantly exceeded that of the S&P 500 and the Diversified Telecommunication Services industry. The net income increased by 179.8% when compared to the same quarter one year prior, rising from $387.37 million to $1,083.85 million.

You can view the full analysis from the report here: Nippon Telegraph & Telephone 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, GSE Systems ( GVP) was down $0.03 (1.8%) to $1.66 on average volume. Throughout the day, 13,966 shares of GSE Systems exchanged hands as compared to its average daily volume of 9,600 shares. The stock ranged in price between $1.65-$1.69 after having opened the day at $1.69 as compared to the previous trading day's close of $1.69.

GSE Systems, Inc. provides simulation, educational, and engineering solutions and services to the nuclear and fossil electric utility industry, and the chemical and petrochemical industries worldwide. GSE Systems has a market cap of $30.8 million and is part of the telecommunications industry. Shares are up 5.6% year-to-date as of the close of trading on Wednesday.

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TheStreet Ratings rates GSE Systems 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 and poor profit margins.

Highlights from TheStreet Ratings analysis on GVP go as follows:

  • GSE SYSTEMS INC 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 reported a trend of declining earnings per share over the past two years. During the past fiscal year, GSE SYSTEMS INC swung to a loss, reporting -$0.58 versus $0.06 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 Software industry. The net income has significantly decreased by 75.2% when compared to the same quarter one year ago, falling from -$1.16 million to -$2.02 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, GSE SYSTEMS INC's return on equity significantly trails that of both the industry average and the S&P 500.
  • The gross profit margin for GSE SYSTEMS INC is currently lower than what is desirable, coming in at 25.86%. It has decreased from the same quarter the previous year. Along with this, the net profit margin of -23.20% is significantly below that of the industry average.
  • The revenue fell significantly faster than the industry average of 7.9%. Since the same quarter one year prior, revenues fell by 29.5%. 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: GSE Systems 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.

CounterPath ( CPAH) was another company that pushed the Technology sector lower today. CounterPath was down $0.10 (8.7%) to $1.05 on heavy volume. Throughout the day, 18,935 shares of CounterPath exchanged hands as compared to its average daily volume of 7,100 shares. The stock ranged in price between $1.01-$1.19 after having opened the day at $1.03 as compared to the previous trading day's close of $1.15.

CounterPath has a market cap of $50.7 million and is part of the telecommunications industry. Shares are up 12.1% year-to-date as of the close of trading on Wednesday. Currently there are no analysts who rate CounterPath a buy, no analysts rate it a sell, and 2 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.

Highlights from TheStreet Ratings analysis on CPAH go as follows:

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