3 Stocks Pushing The Electronics Industry Lower

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The Electronics industry as a whole closed the day up 0.6% versus the S&P 500, which was up 0.1%. Laggards within the Electronics industry included LightPath Technologies ( LPTH), down 2.0%, Digital Power ( DPW), down 5.1%, Transcat ( TRNS), down 1.6%, Pulse Electronics ( PULS), down 6.8% and Sypris Solutions ( SYPR), down 3.8%.

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

Pulse Electronics ( PULS) is one of the companies that pushed the Electronics industry lower today. Pulse Electronics was down $0.16 (6.8%) to $2.21 on heavy volume. Throughout the day, 114,352 shares of Pulse Electronics exchanged hands as compared to its average daily volume of 73,500 shares. The stock ranged in price between $2.21-$2.45 after having opened the day at $2.36 as compared to the previous trading day's close of $2.37.

Pulse Electronics Corporation produces and sells precision-engineered electronic components and modules. It operates in three segments: Network, Power, and Wireless. Pulse Electronics has a market cap of $41.6 million and is part of the health care sector. Shares are down 18.0% year-to-date as of the close of trading on Tuesday.

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TheStreet Ratings rates Pulse Electronics as a sell. The company's weaknesses can be seen in multiple areas, such as its unimpressive growth in net income, poor profit margins and generally disappointing historical performance in the stock itself.

Highlights from TheStreet Ratings analysis on PULS go as follows:

  • 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 Electronic Equipment, Instruments & Components industry. The net income has significantly decreased by 49.3% when compared to the same quarter one year ago, falling from -$5.23 million to -$7.81 million.
  • The gross profit margin for PULSE ELECTRONICS CORP is rather low; currently it is at 23.05%. It has decreased from the same quarter the previous year. Along with this, the net profit margin of -8.34% is significantly below that of the industry average.
  • PULS's stock share price has done very poorly compared to where it was a year ago: Despite any rallies, the net result is that it is down by 32.84%, which is also worse that the performance of the S&P 500 Index. Investors have so far failed to pay much attention to the earnings improvements the company has managed to achieve over the last 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.
  • PULSE ELECTRONICS CORP has improved earnings per share by 30.8% 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. During the past fiscal year, PULSE ELECTRONICS CORP continued to lose money by earning -$3.39 versus -$6.60 in the prior year.
  • Net operating cash flow has significantly increased by 187.37% to $6.65 million when compared to the same quarter last year. In addition, PULSE ELECTRONICS CORP has also vastly surpassed the industry average cash flow growth rate of -20.49%.

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

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