3 Electronics Stocks Nudging The Industry Higher

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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

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