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 1.0% versus the S&P 500, which was down 0.1%. Laggards within the Technology sector included Maxcom Telecomunicaciones SAB de CV ( MXT), down 2.0%, TSR ( TSRI), down 4.4%, Qualstar ( QBAK), down 9.1%, Trio-Tech International ( TRT), down 6.6% and Vicon Industries ( VII), down 2.2%.

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

BT Group ( BT) is one of the companies that pushed the Technology sector lower today. BT Group was down $1.12 (1.7%) to $64.40 on light volume. Throughout the day, 50,795 shares of BT Group exchanged hands as compared to its average daily volume of 124,600 shares. The stock ranged in price between $64.23-$64.68 after having opened the day at $64.23 as compared to the previous trading day's close of $65.52.

BT Group plc provides communications services worldwide. The company operates through BT Global Services, BT Business, BT Consumer, BT Wholesale, and Openreach segments. BT Group has a market cap of $52.0 billion and is part of the telecommunications industry. Shares are up 3.8% year-to-date as of the close of trading on Thursday. Currently there are 4 analysts who rate BT Group a buy, no analysts rate it a sell, and none rate it a hold.

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TheStreet Ratings rates BT Group as a hold. The company's strengths can be seen in multiple areas, such as its revenue growth, expanding profit margins and good cash flow from operations. However, as a counter to these strengths, we find that the growth in the company's earnings per share has not been good.

Highlights from TheStreet Ratings analysis on BT go as follows:

  • The revenue growth came in higher than the industry average of 3.5%. Since the same quarter one year prior, revenues rose by 31.7%. Growth in the company's revenue appears to have helped boost the earnings per share.
  • 35.85% is the gross profit margin for BT GROUP PLC which we consider to be strong. It has increased from the same quarter the previous year. Along with this, the net profit margin of 11.90% is above that of the industry average.
  • The company, on the basis of net income growth from the same quarter one year ago, has significantly outperformed against the S&P 500 and exceeded that of the Diversified Telecommunication Services industry average. The net income increased by 38.0% when compared to the same quarter one year prior, rising from $694.30 million to $958.47 million.
  • Powered by its strong earnings growth of 37.64% and other important driving factors, this stock has surged by 26.03% over the past year, outperforming the rise in the S&P 500 Index during the same period. Looking ahead, however, we cannot assume that the stock's past performance is going to drive future results. Quite to the contrary, its sharp appreciation over the last year is one of the factors that should prompt investors to seek better opportunities elsewhere.

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

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At the close, Qualstar ( QBAK) was down $0.12 (9.1%) to $1.20 on heavy volume. Throughout the day, 25,481 shares of Qualstar exchanged hands as compared to its average daily volume of 11,000 shares. The stock ranged in price between $1.04-$1.33 after having opened the day at $1.33 as compared to the previous trading day's close of $1.32.

Qualstar Corporation designs, develops, manufactures, and sells power supplies and data storage systems worldwide. The company operates in two segments, Power Supplies and Tape Libraries. Qualstar has a market cap of $16.5 million and is part of the telecommunications industry. Shares are up 16.8% year-to-date as of the close of trading on Thursday.

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TheStreet Ratings rates Qualstar as a sell. The company's weaknesses can be seen in multiple areas, such as its disappointing return on equity, weak operating cash flow and generally disappointing historical performance in the stock itself.

Highlights from TheStreet Ratings analysis on QBAK 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 Computers & Peripherals industry and the overall market, QUALSTAR CORP'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 -$2.61 million or 191.49% when compared to the same quarter last year. In addition, when comparing to the industry average, the firm's growth rate is much lower.
  • QBAK has underperformed the S&P 500 Index, declining 10.60% 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.
  • QUALSTAR CORP has improved earnings per share 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, QUALSTAR CORP reported poor results of -$0.85 versus -$0.35 in the prior year.
  • The revenue fell significantly faster than the industry average of 8.6%. Since the same quarter one year prior, revenues fell by 24.8%. The declining revenue has not hurt the company's bottom line, with increasing earnings per share.

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

Maxcom Telecomunicaciones SAB de CV ( MXT) was another company that pushed the Technology sector lower today. Maxcom Telecomunicaciones SAB de CV was down $0.03 (2.0%) to $1.49 on light volume. Throughout the day, 2,768 shares of Maxcom Telecomunicaciones SAB de CV exchanged hands as compared to its average daily volume of 7,400 shares. The stock ranged in price between $1.46-$1.52 after having opened the day at $1.48 as compared to the previous trading day's close of $1.52.

Maxcom Telecomunicaciones, S.A.B. de C.V., an integrated telecommunication services operator, provides voice and data services to residential and small and medium-sized business customers in Mexico. Maxcom Telecomunicaciones SAB de CV has a market cap of $232.9 million and is part of the telecommunications industry. Shares are down 6.8% year-to-date as of the close of trading on Thursday. Currently there are no analysts who rate Maxcom Telecomunicaciones SAB de CV a buy, no analysts rate it a sell, and 1 rates it a hold.

TheStreet Ratings rates Maxcom Telecomunicaciones SAB de CV 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 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 MXT go as follows:

  • MAXCOM TELECOMUNICACIONES SA 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, MAXCOM TELECOMUNICACIONES SA reported poor results of -$0.57 versus -$0.11 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 Diversified Telecommunication Services industry. The net income has significantly decreased by 134.3% when compared to the same quarter one year ago, falling from $4.19 million to -$1.44 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 Diversified Telecommunication Services industry and the overall market, MAXCOM TELECOMUNICACIONES SA's return on equity significantly trails that of both the industry average and the S&P 500.
  • Despite any intermediate fluctuations, we have only bad news to report on this stock's performance over the last year: it has tumbled by 38.12%, worse than the S&P 500's performance. Consistent with the plunge in the stock price, the company's earnings per share are down 133.33% compared to the year-earlier 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.
  • 49.71% is the gross profit margin for MAXCOM TELECOMUNICACIONES SA which we consider to be strong. Despite the high profit margin, it has decreased significantly from the same period last year. Despite the mixed results of the gross profit margin, MXT's net profit margin of -2.88% significantly underperformed when compared to the industry average.

You can view the full analysis from the report here: Maxcom Telecomunicaciones SAB de CV 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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