3 Stocks Pushing The Computer Hardware Industry Lower

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The Computer Hardware industry as a whole closed the day down 1.0% versus the S&P 500, which was down 0.1%. Laggards within the Computer Hardware industry included Lantronix ( LTRX), down 2.1%, Transact Technologies ( TACT), down 1.7%, Astro-Med ( ALOT), down 1.5%, Key Tronic ( KTCC), down 4.7% and Xplore Technologies ( XPLR), down 1.7%.

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

Key Tronic ( KTCC) is one of the companies that pushed the Computer Hardware industry lower today. Key Tronic was down $0.50 (4.7%) to $10.08 on heavy volume. Throughout the day, 43,448 shares of Key Tronic exchanged hands as compared to its average daily volume of 11,000 shares. The stock ranged in price between $10.03-$10.63 after having opened the day at $10.58 as compared to the previous trading day's close of $10.58.

Key Tronic Corporation, doing business as KeyTronicEMS Co., provides electronic manufacturing services (EMS) and solutions to original equipment manufacturers in the United States, Mexico, and China. Key Tronic has a market cap of $111.4 million and is part of the technology sector. Shares are down 4.0% year-to-date as of the close of trading on Thursday.

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TheStreet Ratings rates Key Tronic as a buy. The company's strengths can be seen in multiple areas, such as its largely solid financial position with reasonable debt levels by most measures and reasonable valuation levels. We feel these strengths outweigh the fact that the company has had sub par growth in net income.

Highlights from TheStreet Ratings analysis on KTCC go as follows:

  • KTCC has no debt to speak of therefore resulting in a debt-to-equity ratio of zero, which we consider to be a relatively favorable sign. Along with the favorable debt-to-equity ratio, the company maintains an adequate quick ratio of 1.38, which illustrates the ability to avoid short-term cash problems.
  • KEY TRONIC CORP's earnings per share declined by 50.0% 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, KEY TRONIC CORP increased its bottom line by earning $1.16 versus $1.09 in the prior year.
  • KTCC, with its decline in revenue, underperformed when compared the industry average of 8.6%. Since the same quarter one year prior, revenues slightly dropped by 8.7%. Weakness in the company's revenue seems to have hurt the bottom line, decreasing earnings per share.
  • In its most recent trading session, KTCC 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. Looking ahead, although the push and pull of the overall market trend could certainly make a critical difference, we do not see any strong reason stemming from the company's fundamentals that would cause a continuation of last year's decline. In fact, the stock is now selling for less than others in its industry in relation to its current earnings.

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

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At the close, Transact Technologies ( TACT) was down $0.15 (1.7%) to $8.86 on heavy volume. Throughout the day, 16,111 shares of Transact Technologies exchanged hands as compared to its average daily volume of 8,000 shares. The stock ranged in price between $8.67-$9.10 after having opened the day at $9.02 as compared to the previous trading day's close of $9.01.

TransAct Technologies Incorporated designs, develops, manufactures, and sells transaction-based and specialty printers. Transact Technologies has a market cap of $77.1 million and is part of the technology sector. Shares are down 28.1% year-to-date as of the close of trading on Thursday. Currently there is 1 analyst who rates Transact Technologies a buy, no analysts rate it a sell, and none rate it a hold.

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TheStreet Ratings rates Transact Technologies as a buy. The company's strengths can be seen in multiple areas, such as its largely solid financial position with reasonable debt levels by most measures, expanding profit margins, increase in stock price during the past year and notable return on equity. We feel these strengths outweigh the fact that the company has had sub par growth in net income.

Highlights from TheStreet Ratings analysis on TACT go as follows:

  • TACT has no debt to speak of therefore resulting in a debt-to-equity ratio of zero, which we consider to be a relatively favorable sign. To add to this, TACT has a quick ratio of 2.21, which demonstrates the ability of the company to cover short-term liquidity needs.
  • 44.69% is the gross profit margin for TRANSACT TECHNOLOGIES INC which we consider to be strong. Regardless of TACT's high profit margin, it has managed to decrease from the same period last year. Despite the mixed results of the gross profit margin, TACT's net profit margin of 2.89% is significantly lower than the industry average.
  • TACT, with its decline in revenue, underperformed when compared the industry average of 8.6%. Since the same quarter one year prior, revenues slightly dropped by 9.6%. The declining revenue appears to have seeped down to the company's bottom line, decreasing earnings per share.
  • 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. In comparison to the other companies in the Computers & Peripherals industry and the overall market, TRANSACT TECHNOLOGIES INC's return on equity is significantly below that of the industry average and is below that of the S&P 500.
  • Compared to where it was 12 months ago, the stock is up, but it has so far lagged the appreciation in the S&P 500. Looking ahead, the stock's rise over the last year has already helped drive it to a level which is relatively expensive compared to the rest of its industry. We feel, however, that the other strengths this company displays justify these higher price levels.

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

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Lantronix ( LTRX) was another company that pushed the Computer Hardware industry lower today. Lantronix was down $0.04 (2.1%) to $1.96 on light volume. Throughout the day, 7,416 shares of Lantronix exchanged hands as compared to its average daily volume of 23,600 shares. The stock ranged in price between $1.91-$1.96 after having opened the day at $1.93 as compared to the previous trading day's close of $2.00.

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 $28.7 million and is part of the technology sector. Shares are up 27.8% 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 0.4%. 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 17.47%.
  • 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

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