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 0.5% versus the S&P 500, which was down 0.6%. Laggards within the Technology sector included One Horizon Group ( OHGI), down 4.9%, Vicon Industries ( VII), down 3.2%, Trio-Tech International ( TRT), down 4.5%, Peerless Systems ( PRLS), down 2.6% and RIT Technologies ( RITT), down 8.3%.

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

Turkcell Iletisim Hizmetleri AS ( TKC) is one of the companies that pushed the Technology sector lower today. Turkcell Iletisim Hizmetleri AS was down $0.53 (3.4%) to $15.28 on light volume. Throughout the day, 218,983 shares of Turkcell Iletisim Hizmetleri AS exchanged hands as compared to its average daily volume of 355,600 shares. The stock ranged in price between $15.22-$15.60 after having opened the day at $15.59 as compared to the previous trading day's close of $15.81.

Turkcell Iletisim Hizmetleri AS establishes and operates a Global System for Mobile Communications (GSM) network in Turkey and regional states. It operates through three segments: Turkcell, Euroasia, and Belarusian Telecom. Turkcell Iletisim Hizmetleri AS has a market cap of $14.1 billion and is part of the telecommunications industry. Shares are up 18.4% year-to-date as of the close of trading on Wednesday. Currently there are 2 analysts who rate Turkcell Iletisim Hizmetleri AS a buy, no analysts rate it a sell, and 1 rates it a hold.

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TheStreet Ratings rates Turkcell Iletisim Hizmetleri AS 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 and increase in stock price during the past year. We feel these strengths outweigh the fact that the company has had sub par growth in net income.

Highlights from TheStreet Ratings analysis on TKC go as follows:

  • TKC's debt-to-equity ratio is very low at 0.22 and is currently below that of the industry average, implying that there has been very successful management of debt levels. Along with this, the company maintains a quick ratio of 2.56, which clearly demonstrates the ability to cover short-term cash needs.
  • The gross profit margin for TURKCELL ILETISIM HIZMET is rather high; currently it is at 52.39%. It has increased from the same quarter the previous year. Despite the strong results of the gross profit margin, TKC's net profit margin of 16.67% significantly trails the industry average.
  • TKC, with its decline in revenue, underperformed when compared the industry average of 2.1%. Since the same quarter one year prior, revenues fell by 10.1%. The declining revenue appears to have seeped down to the company's bottom line, decreasing earnings per share.
  • Compared to where it was a year ago today, the stock is now trading at a higher level, regardless of the company's weak earnings results. The stock's price rise over the last year has driven it to a level which is somewhat expensive compared to the rest of its industry. We feel, however, that other strengths this company displays justify these higher price levels.
  • TURKCELL ILETISIM HIZMET's earnings per share declined by 22.9% in the most recent quarter compared to the same quarter a year ago. This company has reported somewhat volatile earnings recently. We feel it is likely to report a decline in earnings in the coming year. During the past fiscal year, TURKCELL ILETISIM HIZMET increased its bottom line by earning $1.40 versus $1.32 in the prior year. For the next year, the market is expecting a contraction of 11.4% in earnings ($1.24 versus $1.40).

You can view the full analysis from the report here: Turkcell Iletisim Hizmetleri AS Ratings Report

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At the close, RIT Technologies ( RITT) was down $0.10 (8.3%) to $1.11 on average volume. Throughout the day, 28,402 shares of RIT Technologies exchanged hands as compared to its average daily volume of 25,900 shares. The stock ranged in price between $1.11-$1.26 after having opened the day at $1.26 as compared to the previous trading day's close of $1.21.

RiT Technologies Ltd. provides intelligent infrastructure management (IIM) and indoor optical wireless technology solutions. Its IIM products enhance security and network utilization for data centers, communication rooms, and work space environments. RIT Technologies has a market cap of $16.3 million and is part of the telecommunications industry. Shares are down 31.2% year-to-date as of the close of trading on Wednesday.

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TheStreet Ratings rates RIT Technologies as a sell. Among the areas we feel are negative, one of the most important has been a generally disappointing historical performance in the stock itself.

Highlights from TheStreet Ratings analysis on RITT go as follows:

  • RITT'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 58.71%, 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 Communications Equipment industry and the overall market, RIT TECHNOLOGIES LTD's return on equity significantly trails that of both the industry average and the S&P 500.
  • Despite currently having a low debt-to-equity ratio of 0.35, it is higher than that of the industry average, inferring that management of debt levels may need to be evaluated further. Despite the fact that RITT's debt-to-equity ratio is mixed in its results, the company's quick ratio of 1.89 is high and demonstrates strong liquidity.
  • 40.28% is the gross profit margin for RIT TECHNOLOGIES LTD which we consider to be strong. 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 -93.84% is in-line with the industry average.
  • RIT TECHNOLOGIES LTD 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 year. During the past fiscal year, RIT TECHNOLOGIES LTD continued to lose money by earning -$1.05 versus -$1.92 in the prior year.

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

Peerless Systems ( PRLS) was another company that pushed the Technology sector lower today. Peerless Systems was down $0.09 (2.6%) to $3.59 on heavy volume. Throughout the day, 11,609 shares of Peerless Systems exchanged hands as compared to its average daily volume of 7,400 shares. The stock ranged in price between $3.55-$3.61 after having opened the day at $3.60 as compared to the previous trading day's close of $3.68.

Peerless Systems Corporation develops and licenses software-based digital imaging and networking systems and supporting electronic technologies to original equipment manufacturers (OEMs) of digital document products located primarily in the United States and Japan. Peerless Systems has a market cap of $10.1 million and is part of the telecommunications industry. Shares are up 1.1% year-to-date as of the close of trading on Wednesday.

TheStreet Ratings rates Peerless Systems as a hold. 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 expanding profit margins. However, as a counter to these strengths, we also find weaknesses including feeble growth in the company's earnings per share, deteriorating net income and disappointing return on equity.

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Highlights from TheStreet Ratings analysis on PRLS go as follows:

  • PRLS 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 this, the company maintains a quick ratio of 49.98, which clearly demonstrates the ability to cover short-term cash needs.
  • The gross profit margin for PEERLESS SYSTEMS CORP is currently very high, coming in at 85.74%. Regardless of PRLS's high profit margin, it has managed to decrease from the same period last year. Despite the mixed results of the gross profit margin, PRLS's net profit margin of 9.32% is significantly lower than the industry average.
  • 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, PEERLESS SYSTEMS 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 -$0.93 million or 374.55% when compared to the same quarter last year. In addition, when comparing to the industry average, the firm's growth rate is much lower.

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

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