3 Stocks Pushing The Internet Industry Lower

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The Internet industry as a whole closed the day down 1.0% versus the S&P 500, which was unchanged. Laggards within the Internet industry included Professional Diversity Network ( IPDN), down 1.7%, Internet Initiative Japan ( IIJI), down 1.7%, Innodata ( INOD), down 1.6%, CafePress ( PRSS), down 3.1% and ChinaNet Online Holdings ( CNET), down 8.0%.

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

Innodata ( INOD) is one of the companies that pushed the Internet industry lower today. Innodata was down $0.05 (1.6%) to $3.09 on average volume. Throughout the day, 16,564 shares of Innodata exchanged hands as compared to its average daily volume of 18,800 shares. The stock ranged in price between $3.03-$3.18 after having opened the day at $3.09 as compared to the previous trading day's close of $3.14.

Innodata Inc. provides business process, information technology, and professional services that are focused on digital enablement. The company operates in two segments, Content Services (CS) and Innodata Advanced Data Solutions (IADS). Innodata has a market cap of $79.1 million and is part of the technology sector. Shares are up 28.2% year-to-date as of the close of trading on Tuesday. Currently there are no analysts who rate Innodata a buy, no analysts rate it a sell, and 1 rates it a hold.

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TheStreet Ratings rates Innodata as a hold. Among the primary strengths of the company is its solid stock price performance. At the same time, however, we also find weaknesses including deteriorating net income, disappointing return on equity and poor profit margins.

Highlights from TheStreet Ratings analysis on INOD go as follows:

  • This stock has managed to rise its share value by 21.53% over the past twelve months. Looking ahead, our view is that this company's fundamentals will not have much impact in either direction, allowing the stock to generally move up or down based on the push and pull of the broad market.
  • Regardless of the drop in revenue, the company managed to outperform against the industry average of 12.2%. Since the same quarter one year prior, revenues fell by 11.4%. The declining revenue appears to have seeped down to the company's bottom line, decreasing earnings per share.
  • INNODATA INC's earnings have gone downhill when comparing its most recently reported quarter with the same quarter a year earlier. The company has reported a trend of declining earnings per share over the past two years. However, the consensus estimate suggests that this trend should reverse in the coming year. During the past fiscal year, INNODATA INC swung to a loss, reporting -$0.43 versus $0.29 in the prior year. This year, the market expects an improvement in earnings (-$0.01 versus -$0.43).
  • 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 IT Services industry and the overall market, INNODATA INC's return on equity significantly trails that of both the industry average and the S&P 500.
  • The gross profit margin for INNODATA INC is rather low; currently it is at 20.92%. It has decreased from the same quarter the previous year. Along with this, the net profit margin of -4.63% is significantly below that of the industry average.

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

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