3 Stocks Raising The Computer Hardware 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 traded up today with the Dow Jones Industrial Average ( ^DJI) trading up 30 points (0.2%) at 17,107 as of Tuesday, Aug. 26, 2014, 4:20 PM ET. The NYSE advances/declines ratio sits at 2,006 issues advancing vs. 1,020 declining with 179 unchanged.

The Computer Hardware industry as a whole closed the day up 1.1% versus the S&P 500, which was up 0.1%. Top gainers within the Computer Hardware industry included Interphase ( INPH), up 4.4%, Qumu ( QUMU), up 1.9%, Echelon ( ELON), up 4.5%, Crossroads Systems ( CRDS), up 2.1% and Acorn Energy ( ACFN), up 2.1%.

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

Echelon ( ELON) is one of the companies that pushed the Computer Hardware industry higher today. Echelon was up $0.10 (4.5%) to $2.30 on average volume. Throughout the day, 133,474 shares of Echelon exchanged hands as compared to its average daily volume of 117,900 shares. The stock ranged in a price between $2.19-$2.31 after having opened the day at $2.22 as compared to the previous trading day's close of $2.20.

Echelon Corporation develops and markets energy control networking platforms. Its products enable everyday devices, including air conditioners, appliances, electricity meters, light switches, thermostats, and valves to be inter-connected. Echelon has a market cap of $93.6 million and is part of the technology sector. Shares are up 2.3% year-to-date as of the close of trading on Monday. Currently there are no analysts who rate Echelon a buy, no analysts rate it a sell, and 1 rates 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 Echelon 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 weak operating cash flow.

Highlights from TheStreet Ratings analysis on ELON go as follows:

  • ECHELON CORP 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. Earnings per share have declined over the last two years. We anticipate that this should continue in the coming year. During the past fiscal year, ECHELON CORP reported poor results of -$0.41 versus -$0.30 in the prior year. For the next year, the market is expecting a contraction of 13.7% in earnings (-$0.47 versus -$0.41).
  • 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 941.5% when compared to the same quarter one year ago, falling from -$0.83 million to -$8.61 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, ECHELON 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 -$3.27 million or 296.68% when compared to the same quarter last year. In addition, when comparing to the industry average, the firm's growth rate is much lower.
  • In its most recent trading session, ELON has closed at a price level that was not very different from its closing price of one year earlier. This is probably due to its weak earnings growth as well as other mixed factors. Turning our attention to the future direction of the stock, we do not believe this stock offers ample reward opportunity to compensate for the risks, despite the fact that it rose over the past year.

You can view the full analysis from the report here: Echelon 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, Qumu ( QUMU) was up $0.25 (1.9%) to $13.50 on light volume. Throughout the day, 4,787 shares of Qumu exchanged hands as compared to its average daily volume of 17,900 shares. The stock ranged in a price between $12.72-$13.50 after having opened the day at $12.72 as compared to the previous trading day's close of $13.25.

Qumu Corporation operates in the enterprise video content management software and disc publishing businesses. Qumu has a market cap of $117.9 million and is part of the technology sector. Shares are up 3.5% year-to-date as of the close of trading on Monday. Currently there is 1 analyst who rates Qumu 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 Qumu as a sell. The company's weaknesses can be seen in multiple areas, such as its unimpressive growth in net income and feeble growth in its earnings per share.

Highlights from TheStreet Ratings analysis on QUMU 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 Computers & Peripherals industry. The net income has significantly decreased by 76.8% when compared to the same quarter one year ago, falling from -$1.95 million to -$3.45 million.
  • QUMU CORP's earnings per share declined by 38.3% 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, QUMU CORP continued to lose money by earning -$1.53 versus -$4.79 in the prior year. For the next year, the market is expecting a contraction of 58.2% in earnings (-$2.42 versus -$1.53).
  • 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 Computers & Peripherals industry and the overall market, QUMU CORP's return on equity significantly trails that of both the industry average and the S&P 500.
  • 47.67% is the gross profit margin for QUMU CORP 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, QUMU's net profit margin of -41.03% significantly underperformed when compared to the industry average.
  • Compared to where it was a year ago, the stock is now trading at a higher level, and has traded in line with the S&P 500. Turning our attention to the future direction of the stock, we do not believe this stock offers ample reward opportunity to compensate for the risks, despite the fact that it rose over the past year.

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

Interphase ( INPH) was another company that pushed the Computer Hardware industry higher today. Interphase was up $0.13 (4.4%) to $3.07 on light volume. Throughout the day, 11,404 shares of Interphase exchanged hands as compared to its average daily volume of 35,500 shares. The stock ranged in a price between $2.92-$3.16 after having opened the day at $2.92 as compared to the previous trading day's close of $2.94.

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 $20.5 million and is part of the technology sector. Shares are down 24.0% year-to-date as of the close of trading on Monday. Currently there are no analysts who rate Interphase a buy, no analysts rate it a sell, and none rate it a hold.

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

Highlights from TheStreet Ratings analysis on INPH 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 Communications Equipment industry. The net income has significantly decreased by 26.0% when compared to the same quarter one year ago, falling from -$0.90 million to -$1.13 million.
  • The gross profit margin for INTERPHASE CORP is currently lower than what is desirable, coming in at 28.17%. It has decreased from the same quarter the previous year. Along with this, the net profit margin of -34.58% is significantly below that of the industry average.
  • Looking at the price performance of INPH's shares over the past 12 months, there is not much good news to report: the stock is down 45.77%, and it has underformed the S&P 500 Index. In addition, the company's earnings per share are lower today than 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.
  • Current return on equity exceeded its ROE from the same quarter one year prior. This is a clear sign of strength within the company. 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.
  • INTERPHASE CORP's earnings per share declined by 23.1% 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, INTERPHASE CORP continued to lose money by earning -$0.39 versus -$0.54 in the prior year.

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.

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.

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