3 Electronics Stocks Nudging The 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 101 points (0.6%) at 17,132 as of Tuesday, Sept. 16, 2014, 4:20 PM ET. The NYSE advances/declines ratio sits at 1,961 issues advancing vs. 1,099 declining with 138 unchanged.

The Electronics industry as a whole closed the day up 0.4% versus the S&P 500, which was up 0.7%. Top gainers within the Electronics industry included Qualstar ( QBAK), up 1.7%, Bel Fuse ( BELFA), up 2.6%, Forward Industries ( FORD), up 2.3%, Data I/O ( DAIO), up 2.9% and LightPath Technologies ( LPTH), up 9.6%.

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

Data I/O ( DAIO) is one of the companies that pushed the Electronics industry higher today. Data I/O was up $0.10 (2.9%) to $3.51 on average volume. Throughout the day, 15,829 shares of Data I/O exchanged hands as compared to its average daily volume of 13,500 shares. The stock ranged in a price between $3.38-$3.63 after having opened the day at $3.38 as compared to the previous trading day's close of $3.41.

Data I/O Corporation designs, manufactures, and sells programming systems for electronic device manufacturers worldwide. The company's programming system products are used to program integrated circuits (ICs) with the specific data necessary for the ICs. Data I/O has a market cap of $26.3 million and is part of the technology sector. Shares are up 30.4% year-to-date as of the close of trading on Monday. Currently there are no analysts who rate Data I/O a buy, no analysts rate it a sell, and none rate it a hold.

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TheStreet Ratings rates Data I/O as a hold. The company's strengths can be seen in multiple areas, such as its revenue growth, largely solid financial position with reasonable debt levels by most measures and solid stock price performance. However, as a counter to these strengths, we find that we feel that the company's cash flow from its operations has been weak overall.

Highlights from TheStreet Ratings analysis on DAIO go as follows:

  • DAIO's revenue growth has slightly outpaced the industry average of 3.6%. Since the same quarter one year prior, revenues slightly increased by 6.2%. Growth in the company's revenue appears to have helped boost the earnings per share.
  • DAIO has no debt to speak of therefore resulting in a debt-to-equity ratio of zero, which we consider to be a relatively favorable sign. To add to this, DAIO has a quick ratio of 2.37, which demonstrates the ability of the company to cover short-term liquidity needs.
  • The gross profit margin for DATA I/O CORP is rather high; currently it is at 56.83%. Regardless of DAIO's high profit margin, it has managed to decrease from the same period last year. Despite the mixed results of the gross profit margin, DAIO's net profit margin of 7.98% compares favorably to the industry average.
  • 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 Electronic Equipment, Instruments & Components industry and the overall market, DATA I/O 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 $0.02 million or 94.58% when compared to the same quarter last year. In addition, when comparing to the industry average, the firm's growth rate is much lower.

You can view the full analysis from the report here: Data I/O 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, Bel Fuse ( BELFA) was up $0.62 (2.6%) to $24.66 on light volume. Throughout the day, 200 shares of Bel Fuse exchanged hands as compared to its average daily volume of 1,200 shares. The stock ranged in a price between $24.66-$24.66 after having opened the day at $24.66 as compared to the previous trading day's close of $24.04.

Bel Fuse Inc. designs, manufactures, and sells products used in the networking, telecommunication, high-speed data transmission, commercial aerospace, military, broadcasting, transportation, and consumer electronic industries worldwide. Bel Fuse has a market cap of $53.1 million and is part of the technology sector. Shares are up 25.5% year-to-date as of the close of trading on Monday. Currently there are no analysts who rate Bel Fuse 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 Bel Fuse as a buy. The company's strengths can be seen in multiple areas, such as its revenue growth, solid stock price performance, impressive record of earnings per share growth, compelling growth in net income and reasonable valuation levels. We feel these strengths outweigh the fact that the company shows low profit margins.

Highlights from TheStreet Ratings analysis on BELFA go as follows:

  • BELFA's revenue growth has slightly outpaced the industry average of 3.3%. Since the same quarter one year prior, revenues slightly increased by 5.8%. Growth in the company's revenue appears to have helped boost the earnings per share.
  • Powered by its strong earnings growth of 80.00% and other important driving factors, this stock has surged by 35.32% over the past year, outperforming the rise in the S&P 500 Index during the same period. Turning to the future, naturally, any stock can fall in a major bear market. However, in almost any other environment, the stock should continue to move higher despite the fact that it has already enjoyed nice gains in the past year.
  • BEL FUSE INC reported significant earnings per share improvement in the most recent quarter compared to the same quarter a year ago. The company has demonstrated a pattern of positive earnings per share growth over the past two years. We feel that this trend should continue. During the past fiscal year, BEL FUSE INC increased its bottom line by earning $1.39 versus $0.19 in the prior year. This year, the market expects an improvement in earnings ($1.65 versus $1.39).
  • The net income growth from the same quarter one year ago has significantly exceeded that of the S&P 500 and the Communications Equipment industry. The net income increased by 81.5% when compared to the same quarter one year prior, rising from $1.69 million to $3.07 million.

You can view the full analysis from the report here: Bel Fuse 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.

Qualstar ( QBAK) was another company that pushed the Electronics industry higher today. Qualstar was up $0.02 (1.7%) to $1.21 on light volume. Throughout the day, 4,050 shares of Qualstar exchanged hands as compared to its average daily volume of 9,800 shares. The stock ranged in a price between $1.18-$1.22 after having opened the day at $1.18 as compared to the previous trading day's close of $1.19.

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 $14.6 million and is part of the technology sector. Shares are up 5.3% year-to-date as of the close of trading on Monday. Currently there are no analysts who rate Qualstar a buy, no analysts rate it a sell, and none rate it a hold.

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.

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 15.61% 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 9.3%. 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.

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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