3 Stocks Pushing The Electronics Industry Lower

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The Electronics industry as a whole closed the day up 0.3% versus the S&P 500, which was up 0.4%. Laggards within the Electronics industry included Qualstar ( QBAK), down 3.7%, Tel Instrument Electronics ( TIK), down 1.6%, LGL Group ( LGL), down 4.3%, Aetrium ( ATRM), down 6.6% and SemiLEDs ( LEDS), down 4.4%.

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

Aetrium ( ATRM) is one of the companies that pushed the Electronics industry lower today. Aetrium was down $0.37 (6.6%) to $5.25 on light volume. Throughout the day, 4,242 shares of Aetrium exchanged hands as compared to its average daily volume of 8,000 shares. The stock ranged in price between $5.25-$5.84 after having opened the day at $5.50 as compared to the previous trading day's close of $5.62.

Aetrium Incorporated designs, manufactures, and markets various electromechanical equipment used in handling and testing integrated circuits (ICs). Aetrium has a market cap of $5.7 million and is part of the technology sector. Shares are down 15.9% year-to-date as of the close of trading on Wednesday.

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TheStreet Ratings rates Aetrium as a sell. The area that we feel has been the company's primary weakness has been its disappointing return on equity.

Highlights from TheStreet Ratings analysis on ATRM go as follows:

  • 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 Semiconductors & Semiconductor Equipment industry and the overall market, AETRIUM INC's return on equity significantly trails that of both the industry average and the S&P 500.
  • 40.64% is the gross profit margin for AETRIUM INC which we consider to be strong. Regardless of ATRM's high profit margin, it has managed to decrease from the same period last year. Despite the mixed results of the gross profit margin, ATRM's net profit margin of -9.08% significantly underperformed when compared to the industry average.
  • Net operating cash flow has significantly increased by 150.03% to $0.64 million when compared to the same quarter last year. In addition, AETRIUM INC has also vastly surpassed the industry average cash flow growth rate of -11.39%.
  • ATRM's debt-to-equity ratio is very low at 0.01 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 3.34, which clearly demonstrates the ability to cover short-term cash needs.
  • This stock has increased by 31.89% over the past year, outperforming the rise in the S&P 500 Index during the same period. Regarding the future course of this stock, we feel that the risks involved in investing in ATRM do not compensate for any future upside potential, despite the fact that it has seen nice gains over the past 12 months.

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

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At the close, LGL Group ( LGL) was down $0.20 (4.3%) to $4.46 on average volume. Throughout the day, 10,186 shares of LGL Group exchanged hands as compared to its average daily volume of 8,400 shares. The stock ranged in price between $4.35-$4.72 after having opened the day at $4.40 as compared to the previous trading day's close of $4.66.

The LGL Group, Inc., through its subsidiaries, designs, manufactures, and markets standard and custom-engineered electronic components in the United States and internationally. LGL Group has a market cap of $12.4 million and is part of the technology sector. Shares are down 13.9% year-to-date as of the close of trading on Wednesday.

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TheStreet Ratings rates LGL Group 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, poor profit margins and generally disappointing historical performance in the stock itself.

Highlights from TheStreet Ratings analysis on LGL go as follows:

  • LGL GROUP INC 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, LGL GROUP INC reported poor results of -$3.16 versus -$0.51 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 Electronic Equipment, Instruments & Components industry. The net income has significantly decreased by 874.7% when compared to the same quarter one year ago, falling from -$0.08 million to -$0.81 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 Electronic Equipment, Instruments & Components industry and the overall market, LGL GROUP INC's return on equity significantly trails that of both the industry average and the S&P 500.
  • The gross profit margin for LGL GROUP INC is currently lower than what is desirable, coming in at 29.86%. It has decreased from the same quarter the previous year. Along with this, the net profit margin of -13.19% is significantly below that of the industry average.
  • The share price of LGL GROUP INC has not done very well: it is down 18.60% 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.

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

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Qualstar ( QBAK) was another company that pushed the Electronics industry lower today. Qualstar was down $0.04 (3.7%) to $1.18 on light volume. Throughout the day, 4,377 shares of Qualstar exchanged hands as compared to its average daily volume of 10,900 shares. The stock ranged in price between $1.17-$1.23 after having opened the day at $1.23 as compared to the previous trading day's close of $1.22.

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 $14.1 million and is part of the technology sector. Shares are up 8.4% year-to-date as of the close of trading on Wednesday.

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.

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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 15.39% 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 9.0%. 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.

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