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 0.9% versus the S&P 500, which was down 0.6%. Laggards within the Computer Hardware industry included Dataram ( DRAM), down 2.7%, Elecsys ( ESYS), down 3.5%, Overland Storage ( OVRL), down 6.2%, SMART Technologies ( SMT), down 2.4% and Crossroads Systems ( CRDS), down 2.4%.

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

Crossroads Systems ( CRDS) is one of the companies that pushed the Computer Hardware industry lower today. Crossroads Systems was down $0.07 (2.4%) to $2.88 on light volume. Throughout the day, 26,304 shares of Crossroads Systems exchanged hands as compared to its average daily volume of 156,600 shares. The stock ranged in price between $2.84-$2.97 after having opened the day at $2.97 as compared to the previous trading day's close of $2.95.

Crossroads Systems, Inc. provides data protection solutions and services worldwide. Crossroads Systems has a market cap of $44.7 million and is part of the technology sector. Shares are up 22.4% year-to-date as of the close of trading on Thursday.

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TheStreet Ratings rates Crossroads Systems as a sell. Among the areas we feel are negative, one of the most important has been very high debt management risk by most measures.

Highlights from TheStreet Ratings analysis on CRDS go as follows:

  • The debt-to-equity ratio is very high at 2.72 and currently higher than the industry average, implying increased risk associated with the management of debt levels within the company. Regardless of the company's weak debt-to-equity ratio, CRDS has managed to keep a strong quick ratio of 2.04, which demonstrates the ability to cover short-term cash needs.
  • 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 Computers & Peripherals industry and the overall market, CROSSROADS SYSTEMS INC's return on equity significantly trails that of both the industry average and the S&P 500.
  • CROSSROADS SYSTEMS INC reported significant earnings per share improvement 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, CROSSROADS SYSTEMS INC reported poor results of -$1.21 versus -$0.96 in the prior year.
  • CRDS, with its decline in revenue, underperformed when compared the industry average of 2.1%. Since the same quarter one year prior, revenues fell by 16.1%. The declining revenue has not hurt the company's bottom line, with increasing earnings per share.
  • The gross profit margin for CROSSROADS SYSTEMS INC is currently very high, coming in at 87.89%. 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 -75.86% is in-line with the industry average.

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

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At the close, SMART Technologies ( SMT) was down $0.06 (2.4%) to $2.44 on light volume. Throughout the day, 45,820 shares of SMART Technologies exchanged hands as compared to its average daily volume of 169,900 shares. The stock ranged in price between $2.39-$2.52 after having opened the day at $2.39 as compared to the previous trading day's close of $2.50.

SMART Technologies has a market cap of $104.2 million and is part of the technology sector. Shares are up 14.2% year-to-date as of the close of trading on Thursday. Currently there are no analysts who rate SMART Technologies a buy, no analysts rate it a sell, and 2 rate it a hold.

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Highlights from TheStreet Ratings analysis on SMT go as follows:

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

Overland Storage ( OVRL) was another company that pushed the Computer Hardware industry lower today. Overland Storage was down $0.25 (6.2%) to $3.74 on light volume. Throughout the day, 34,636 shares of Overland Storage exchanged hands as compared to its average daily volume of 106,200 shares. The stock ranged in price between $3.74-$4.00 after having opened the day at $3.97 as compared to the previous trading day's close of $3.99.

Overland Storage, Inc. provides unified data management and data protection solutions worldwide. Overland Storage has a market cap of $72.6 million and is part of the technology sector. Shares are down 17.7% year-to-date as of the close of trading on Thursday. Currently there is 1 analyst who rates Overland Storage a buy, no analysts rate it a sell, and 1 rates it a hold.

TheStreet Ratings rates Overland Storage as a sell. The company's weaknesses can be seen in multiple areas, such as its deteriorating net income, weak operating cash flow and generally disappointing historical performance in the stock itself.

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 OVRL 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 30.4% when compared to the same quarter one year ago, falling from -$5.09 million to -$6.63 million.
  • Net operating cash flow has significantly decreased to -$6.46 million or 124.93% when compared to the same quarter last year. In addition, when comparing to the industry average, the firm's growth rate is much lower.
  • OVRL'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 28.11%, 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.
  • Despite currently having a low debt-to-equity ratio of 0.34, it is higher than that of the industry average, inferring that management of debt levels may need to be evaluated further. Regardless of the somewhat mixed results with the debt-to-equity ratio, the company's quick ratio of 0.70 is weak.
  • Compared to other companies in the Computers & Peripherals industry and the overall market, OVERLAND STORAGE INC's return on equity significantly trails that of both the industry average and the S&P 500.

You can view the full analysis from the report here: Overland Storage 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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