3 Computer Software & Services Stocks Nudging The Industry Higher

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.

All three major indices are trading down today with the Dow Jones Industrial Average ( ^DJI) trading down 64.62 points (-0.4%) at 16,379 as of Thursday, Aug. 7, 2014, 3:55 PM ET. The NYSE advances/declines ratio sits at 1,596 issues advancing vs. 1,415 declining with 129 unchanged.

The Computer Software & Services industry as a whole closed the day down 0.2% versus the S&P 500, which was down 0.6%. Top gainers within the Computer Software & Services industry included Cover-All Technologies ( COVR), up 1.6%, MGT Capital Investments ( MGT), up 3.7%, XRS ( XRSC), up 5.2%, PAR Technology ( PAR), up 4.5% and Authentidate ( ADAT), up 11.6%.

TheStreet Ratings Group would like to highlight 3 stocks pushing the industry higher today:

Authentidate ( ADAT) is one of the companies that pushed the Computer Software & Services industry higher today. Authentidate was up $0.08 (11.6%) to $0.72 on light volume. Throughout the day, 82,316 shares of Authentidate exchanged hands as compared to its average daily volume of 128,700 shares. The stock ranged in a price between $0.65-$0.74 after having opened the day at $0.71 as compared to the previous trading day's close of $0.64.

Authentidate Holding Corp. provides Web-based software applications, and telehealth products and services in the United States. Authentidate has a market cap of $23.8 million and is part of the technology sector. Shares are down 51.9% year-to-date as of the close of trading on Wednesday. Currently there are no analysts who rate Authentidate a buy, no analysts rate it a sell, and none 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.

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

Highlights from TheStreet Ratings analysis on ADAT go as follows:

  • Net operating cash flow has decreased to -$1.53 million or 21.62% when compared to the same quarter last year. In addition, when comparing the cash generation rate to the industry average, the firm's growth is significantly lower.
  • The gross profit margin for AUTHENTIDATE HOLDING CORP is currently lower than what is desirable, coming in at 31.56%. Regardless of ADAT's low profit margin, it has managed to increase from the same period last year. Despite the mixed results of the gross profit margin, ADAT's net profit margin of -129.59% significantly underperformed when compared to the industry average.
  • ADAT'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 37.86%, 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.
  • The company's current return on equity greatly increased when compared to its ROE from the same quarter one year prior. This is a signal of significant strength within the corporation. Compared to other companies in the Health Care Technology industry and the overall market, AUTHENTIDATE HOLDING CORP's return on equity significantly trails that of both the industry average and the S&P 500.
  • AUTHENTIDATE HOLDING CORP 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, AUTHENTIDATE HOLDING CORP reported poor results of -$0.45 versus -$0.36 in the prior year.

You can view the full analysis from the report here: Authentidate 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, PAR Technology ( PAR) was up $0.17 (4.5%) to $3.97 on heavy volume. Throughout the day, 55,718 shares of PAR Technology exchanged hands as compared to its average daily volume of 20,600 shares. The stock ranged in a price between $3.81-$4.02 after having opened the day at $3.96 as compared to the previous trading day's close of $3.80.

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 $59.1 million and is part of the technology sector. Shares are down 30.3% year-to-date as of the close of trading on Wednesday. Currently there are no analysts who rate PAR Technology a buy, no analysts rate it a sell, and none 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.

TheStreet Ratings rates PAR Technology as a sell. The company's weaknesses can be seen in multiple areas, such as its generally disappointing historical performance in the stock itself, unimpressive growth in net income and poor profit margins.

Highlights from TheStreet Ratings analysis on PAR go as follows:

  • The share price of PAR TECHNOLOGY CORP has not done very well: it is down 7.15% and has underperformed the S&P 500, in part reflecting the company's sharply declining earnings per share when compared to the year-earlier quarter. Looking ahead, other than the push or pull of the broad market, we do not see anything in the company's numbers that may help reverse the decline experienced over the past 12 months. Despite the past decline, the stock is still selling for more than most others in its industry.
  • 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.
  • 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, with its decline in revenue, underperformed when compared the industry average of 9.7%. Since the same quarter one year prior, revenues fell by 15.2%. 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: PAR Technology 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.

Cover-All Technologies ( COVR) was another company that pushed the Computer Software & Services industry higher today. Cover-All Technologies was up $0.02 (1.6%) to $1.25 on light volume. Throughout the day, 4,400 shares of Cover-All Technologies exchanged hands as compared to its average daily volume of 18,700 shares. The stock ranged in a price between $1.24-$1.27 after having opened the day at $1.24 as compared to the previous trading day's close of $1.23.

Cover-All Technologies Inc., through its subsidiary, Cover-All Systems, Inc., licenses and maintains software products for the property/casualty insurance industry in the United States and Puerto Rico. Cover-All Technologies has a market cap of $32.2 million and is part of the technology sector. Shares are down 12.1% year-to-date as of the close of trading on Wednesday. Currently there are no analysts who rate Cover-All Technologies a buy, no analysts rate it a sell, and none rate it a hold.

TheStreet Ratings rates Cover-All Technologies as a sell. The company's weaknesses can be seen in multiple areas, such as its deteriorating net income, disappointing return on equity and generally disappointing historical performance in the stock itself.

Highlights from TheStreet Ratings analysis on COVR 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 Software industry. The net income has significantly decreased by 38.4% when compared to the same quarter one year ago, falling from $0.71 million to $0.43 million.
  • Current return on equity is lower than its ROE from the same quarter one year prior. This is a clear sign of weakness within the company. Compared to other companies in the Software industry and the overall market, COVER-ALL TECHNOLOGIES INC's return on equity significantly trails that of both the industry average and the S&P 500.
  • The share price of COVER-ALL TECHNOLOGIES INC has not done very well: it is down 8.28% and has underperformed the S&P 500, in part reflecting the company's sharply declining earnings per share when compared to the year-earlier quarter. 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.
  • COVER-ALL TECHNOLOGIES INC's earnings per share declined 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, COVER-ALL TECHNOLOGIES INC continued to lose money by earning -$0.10 versus -$0.20 in the prior year.
  • The revenue fell significantly faster than the industry average of 11.1%. Since the same quarter one year prior, revenues fell by 24.4%. 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: Cover-All 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.

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.

If you liked this article you might like

Reverse Mergers Losing Out to Lower-Cost Offerings

Reverse Mergers Losing Out to Lower-Cost Offerings

3 Stocks Improving Performance Of The Technology Sector

3 Stocks Improving Performance Of The Technology Sector

3 Computer Software & Services Stocks Pushing Industry Growth

3 Computer Software & Services Stocks Pushing Industry Growth

3 Stocks Pushing The Computer Software & Services Industry Lower

3 Stocks Pushing The Computer Software & Services Industry Lower

3 Technology Stocks Pushing Sector Growth

3 Technology Stocks Pushing Sector Growth