3 Stocks Pushing The Internet 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 are trading down today with the Dow Jones Industrial Average ( ^DJI) trading down 42.44 points (-0.2%) at 17,080 as of Thursday, Aug. 28, 2014, 4:20 PM ET. The NYSE advances/declines ratio sits at 1,267 issues advancing vs. 1,750 declining with 176 unchanged.

The Internet industry as a whole closed the day down 0.8% versus the S&P 500, which was down 0.2%. Top gainers within the Internet industry included Synacor ( SYNC), up 4.2%, Limelight Networks ( LLNW), up 2.6%, Coupons.com Incorporated ( COUP), up 6.2%, CRITEO ( CRTO), up 1.7% and Youku Tudou ( YOKU), up 2.4%.

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

Coupons.com Incorporated ( COUP) is one of the companies that pushed the Internet industry higher today. Coupons.com Incorporated was up $0.82 (6.2%) to $13.96 on average volume. Throughout the day, 359,179 shares of Coupons.com Incorporated exchanged hands as compared to its average daily volume of 401,400 shares. The stock ranged in a price between $13.02-$14.23 after having opened the day at $13.28 as compared to the previous trading day's close of $13.14.

Coupons.com Incorporated has a market cap of $1.0 billion and is part of the technology sector. Shares are unchanged year-to-date as of the close of trading on Wednesday.

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At the close, Limelight Networks ( LLNW) was up $0.06 (2.6%) to $2.35 on average volume. Throughout the day, 438,743 shares of Limelight Networks exchanged hands as compared to its average daily volume of 453,900 shares. The stock ranged in a price between $2.27-$2.37 after having opened the day at $2.29 as compared to the previous trading day's close of $2.29.

Limelight Networks, Inc. provides content delivery and related services in the Americas, Europe, the Middle East, Africa, and the Asia Pacific. Limelight Networks has a market cap of $222.4 million and is part of the technology sector. Shares are up 15.7% year-to-date as of the close of trading on Wednesday. Currently there is 1 analyst who rates Limelight Networks a buy, 1 analyst rates it a sell, and 3 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 Limelight Networks as a sell. The company's weaknesses can be seen in multiple areas, such as its disappointing return on equity and weak operating cash flow.

Highlights from TheStreet Ratings analysis on LLNW 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 Internet Software & Services industry and the overall market, LIMELIGHT NETWORKS INC'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 $1.50 million or 67.85% when compared to the same quarter last year. In addition, when comparing to the industry average, the firm's growth rate is much lower.
  • LLNW, with its decline in revenue, underperformed when compared the industry average of 19.9%. Since the same quarter one year prior, revenues slightly dropped by 3.3%. The declining revenue has not hurt the company's bottom line, with increasing earnings per share.
  • Compared to where it was 12 months ago, the stock is up, but it has so far lagged the appreciation in 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.
  • LIMELIGHT NETWORKS INC has improved earnings per share by 41.7% in the most recent quarter compared to the same quarter a year ago. This company has reported somewhat volatile earnings recently. But, we feel it is poised for EPS growth in the coming year. During the past fiscal year, LIMELIGHT NETWORKS INC reported poor results of -$0.36 versus -$0.30 in the prior year. This year, the market expects an improvement in earnings (-$0.21 versus -$0.36).

You can view the full analysis from the report here: Limelight Networks 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.

Synacor ( SYNC) was another company that pushed the Internet industry higher today. Synacor was up $0.08 (4.2%) to $2.01 on heavy volume. Throughout the day, 339,253 shares of Synacor exchanged hands as compared to its average daily volume of 60,900 shares. The stock ranged in a price between $1.90-$2.02 after having opened the day at $1.90 as compared to the previous trading day's close of $1.93.

Synacor, Inc. provides startpages and homescreens, TV Everywhere solutions, Identity Management services, and various cloud-based services across a range of devices for cable, satellite, telecom, and consumer electronics companies in the United States, and the United Kingdom. Synacor has a market cap of $53.6 million and is part of the technology sector. Shares are down 21.2% year-to-date as of the close of trading on Wednesday. Currently there are no analysts who rate Synacor a buy, 1 analyst rates it a sell, and 1 rates it a hold.

TheStreet Ratings rates Synacor 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, weak operating cash flow and generally disappointing historical performance in the stock itself.

Highlights from TheStreet Ratings analysis on SYNC go as follows:

  • SYNACOR 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. 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, SYNACOR INC swung to a loss, reporting -$0.04 versus $0.14 in the prior year. For the next year, the market is expecting a contraction of 600.0% in earnings (-$0.28 versus -$0.04).
  • 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 Internet Software & Services industry. The net income has significantly decreased by 154.5% when compared to the same quarter one year ago, falling from -$0.73 million to -$1.87 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 Internet Software & Services industry and the overall market, SYNACOR INC'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 -$4.61 million or 942.23% when compared to the same quarter last year. In addition, when comparing to the industry average, the firm's growth rate is much lower.
  • Despite any intermediate fluctuations, we have only bad news to report on this stock's performance over the last year: it has tumbled by 27.04%, worse than the S&P 500's performance. Consistent with the plunge in the stock price, the company's earnings per share are down 250.00% compared to the year-earlier quarter. Turning toward the future, the fact that the stock has come down in price over the past year should not necessarily be interpreted as a negative; it could be one of the factors that may help make the stock attractive down the road. Right now, however, we believe that it is too soon to buy.

You can view the full analysis from the report here: Synacor 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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