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 1.3% versus the S&P 500, which was down 0.2%. Laggards within the Computer Hardware industry included Lantronix ( LTRX), down 5.1%, Interphase ( INPH), down 16.5%, Transact Technologies ( TACT), down 1.7%, Dataram ( DRAM), down 2.6% and Elecsys ( ESYS), down 2.6%.

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

Transact Technologies ( TACT) is one of the companies that pushed the Computer Hardware industry lower today. Transact Technologies was down $0.13 (1.7%) to $7.39 on heavy volume. Throughout the day, 52,149 shares of Transact Technologies exchanged hands as compared to its average daily volume of 12,800 shares. The stock ranged in price between $7.37-$7.58 after having opened the day at $7.37 as compared to the previous trading day's close of $7.52.

TransAct Technologies Incorporated designs, develops, manufactures, and sells transaction-based and specialty printers. Transact Technologies has a market cap of $61.1 million and is part of the technology sector. Shares are down 40.0% year-to-date as of the close of trading on Monday. 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 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, good cash flow from operations and expanding profit margins. However, as a counter to these strengths, we also find weaknesses including a generally disappointing performance in the stock itself, deteriorating net income and disappointing return on equity.

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 2.03, which demonstrates the ability of the company to cover short-term liquidity needs.
  • Net operating cash flow has significantly increased by 173.68% to $2.70 million when compared to the same quarter last year. In addition, TRANSACT TECHNOLOGIES INC has also vastly surpassed the industry average cash flow growth rate of 34.06%.
  • 44.59% is the gross profit margin for TRANSACT TECHNOLOGIES INC which we consider to be strong. It has increased from the same quarter the previous year. Despite the strong results of the gross profit margin, TACT's net profit margin of 1.26% significantly trails the industry average.
  • The share price of TRANSACT TECHNOLOGIES INC has not done very well: it is down 21.80% 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, we do not see anything in this company's numbers that would change the one-year trend. It was down over the last twelve months; and it could be down again in the next twelve. Naturally, a bull or bear market could sway the movement of this stock.
  • 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. 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.

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

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At the close, Interphase ( INPH) was down $0.54 (16.5%) to $2.74 on heavy volume. Throughout the day, 76,232 shares of Interphase exchanged hands as compared to its average daily volume of 13,200 shares. The stock ranged in price between $2.60-$3.20 after having opened the day at $3.20 as compared to the previous trading day's close of $3.28.

Interphase Corporation, an information and communications technology company, provides connectivity, interworking, and packet processing solutions in the Pacific Rim, North America, and Europe. Interphase has a market cap of $24.5 million and is part of the technology sector. Shares are down 9.6% year-to-date as of the close of trading on Monday.

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

Highlights from TheStreet Ratings analysis on INPH go as follows:

  • The gross profit margin for INTERPHASE CORP is currently lower than what is desirable, coming in at 32.97%. It has decreased from the same quarter the previous year. Along with this, the net profit margin of -29.59% is significantly below that of the industry average.
  • Net operating cash flow has significantly decreased to -$0.77 million or 67.53% when compared to the same quarter last year. In addition, when comparing to the industry average, the firm's growth rate is much lower.
  • INPH'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 28.82%, 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, INTERPHASE CORP'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 0.57, 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 INPH's debt-to-equity ratio is mixed in its results, the company's quick ratio of 1.92 is high and demonstrates strong liquidity.

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

Lantronix ( LTRX) was another company that pushed the Computer Hardware industry lower today. Lantronix was down $0.10 (5.1%) to $1.85 on heavy volume. Throughout the day, 127,638 shares of Lantronix exchanged hands as compared to its average daily volume of 21,600 shares. The stock ranged in price between $1.81-$2.08 after having opened the day at $2.00 as compared to the previous trading day's close of $1.95.

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 $26.7 million and is part of the technology sector. Shares are up 24.6% year-to-date as of the close of trading on Monday. 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.

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 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 2.7%. 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 14.40%.
  • 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

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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