3 Stocks Pushing The Technology Sector 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 Technology sector as a whole closed the day down 1.9% versus the S&P 500, which was down 0.1%. Laggards within the Technology sector included Maxcom Telecomunicaciones SAB de CV ( MXT), down 3.5%, Sajan ( SAJA), down 3.3%, Bio-Rad Laboratories ( BIO.B), down 2.1%, GRAVITY ( GRVY), down 5.8% and Electro-Sensors ( ELSE), down 3.1%.

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

China Unicom (Hong Kong ( CHU) is one of the companies that pushed the Technology sector lower today. China Unicom (Hong Kong was down $0.30 (1.7%) to $17.49 on light volume. Throughout the day, 245,131 shares of China Unicom (Hong Kong exchanged hands as compared to its average daily volume of 396,400 shares. The stock ranged in price between $17.47-$17.64 after having opened the day at $17.62 as compared to the previous trading day's close of $17.79.

China Unicom (Hong Kong) Limited, an investment holding company, provides cellular and fixed-line voice, broadband and other Internet-related, information communications technology, and business and data communications services in China. China Unicom (Hong Kong has a market cap of $41.8 billion and is part of the telecommunications industry. Shares are up 18.1% year-to-date as of the close of trading on Friday. Currently there are 2 analysts who rate China Unicom (Hong Kong a buy, no analysts rate it a sell, and 1 rates it a hold.

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TheStreet Ratings rates China Unicom (Hong Kong 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, notable return on equity and increase in stock price during the past year. However, as a counter to these strengths, we also find weaknesses including unimpressive growth in net income, weak operating cash flow and poor profit margins.

Highlights from TheStreet Ratings analysis on CHU go as follows:

  • CHINA UNICOM (HONG KONG) LTD's earnings per share declined by 12.5% 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, CHINA UNICOM (HONG KONG) LTD increased its bottom line by earning $0.71 versus $0.47 in the prior year. This year, the market expects an improvement in earnings ($0.84 versus $0.71).
  • The debt-to-equity ratio is somewhat low, currently at 0.61, and is less than that of the industry average, implying that there has been a relatively successful effort in the management of debt levels. Even though the company has a strong debt-to-equity ratio, the quick ratio of 0.15 is very weak and demonstrates a lack of ability to pay short-term obligations.
  • CHU, with its decline in revenue, slightly underperformed the industry average of 1.4%. Since the same quarter one year prior, revenues slightly dropped by 2.8%. The declining revenue appears to have seeped down to the company's bottom line, decreasing earnings per share.
  • Net operating cash flow has declined marginally to $3,798.52 million or 5.37% when compared to the same quarter last year. Despite a decrease in cash flow CHINA UNICOM (HONG KONG) LTD is still fairing well by exceeding its industry average cash flow growth rate of -21.96%.
  • The company, on the basis of change in net income from the same quarter one year ago, has underperformed when compared to that of the S&P 500 and greatly underperformed compared to the Diversified Telecommunication Services industry average. The net income has decreased by 2.4% when compared to the same quarter one year ago, dropping from $560.57 million to $547.07 million.

You can view the full analysis from the report here: China Unicom (Hong Kong 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, Sajan ( SAJA) was down $0.18 (3.3%) to $5.32 on average volume. Throughout the day, 1,813 shares of Sajan exchanged hands as compared to its average daily volume of 2,100 shares. The stock ranged in price between $5.22-$5.70 after having opened the day at $5.22 as compared to the previous trading day's close of $5.50.

Sajan has a market cap of $20.9 million and is part of the telecommunications industry. Shares are down 5.2% year-to-date as of the close of trading on Friday.

STOCKS TO BUY: TheStreet Quant Ratings has identified a handful of stocks that can potentially TRIPLE in the next 12 months. Learn more.

Maxcom Telecomunicaciones SAB de CV ( MXT) was another company that pushed the Technology sector lower today. Maxcom Telecomunicaciones SAB de CV was down $0.05 (3.5%) to $1.40 on light volume. Throughout the day, 660 shares of Maxcom Telecomunicaciones SAB de CV exchanged hands as compared to its average daily volume of 4,200 shares. The stock ranged in price between $1.40-$1.45 after having opened the day at $1.43 as compared to the previous trading day's close of $1.45.

Maxcom Telecomunicaciones, S.A.B. de C.V., an integrated telecommunication services operator, provides voice and data services to residential and small and medium-sized business customers in Mexico. Maxcom Telecomunicaciones SAB de CV has a market cap of $216.5 million and is part of the telecommunications industry. Shares are down 11.0% year-to-date as of the close of trading on Friday. Currently there are no analysts who rate Maxcom Telecomunicaciones SAB de CV a buy, no analysts rate it a sell, and 1 rates it a hold.

TheStreet Ratings rates Maxcom Telecomunicaciones SAB de CV 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 generally disappointing historical performance in the stock itself.

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 MXT go as follows:

  • MAXCOM TELECOMUNICACIONES SA 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, MAXCOM TELECOMUNICACIONES SA reported poor results of -$0.57 versus -$0.11 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 Diversified Telecommunication Services industry. The net income has significantly decreased by 134.3% when compared to the same quarter one year ago, falling from $4.19 million to -$1.44 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 Diversified Telecommunication Services industry and the overall market, MAXCOM TELECOMUNICACIONES SA's return on equity significantly trails that of both the industry average and the S&P 500.
  • Despite any intermediate fluctuations, we have only bad news to report on this stock's performance over the last year: it has tumbled by 43.55%, worse than the S&P 500's performance. Consistent with the plunge in the stock price, the company's earnings per share are down 133.33% compared to 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.
  • 49.71% is the gross profit margin for MAXCOM TELECOMUNICACIONES SA 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, MXT's net profit margin of -2.88% significantly underperformed when compared to the industry average.

You can view the full analysis from the report here: Maxcom Telecomunicaciones SAB de CV 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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