3 Stocks Pushing The Internet Industry 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 Internet industry as a whole was unchanged today versus the S&P 500, which was up 0.1%. Laggards within the Internet industry included Travelzoo ( TZOO), down 2.0%, eLong ( LONG), down 1.6%, Care.com ( CRCM), down 2.2%, LiveDeal ( LIVE), down 4.0% and VirnetX ( VHC), down 8.2%.

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

Care.com ( CRCM) is one of the companies that pushed the Internet industry lower today. Care.com was down $0.19 (2.2%) to $8.55 on light volume. Throughout the day, 45,612 shares of Care.com exchanged hands as compared to its average daily volume of 135,300 shares. The stock ranged in price between $8.54-$8.88 after having opened the day at $8.78 as compared to the previous trading day's close of $8.74.

Care.com has a market cap of $267.2 million and is part of the technology sector. Shares are unchanged year-to-date as of the close of trading on Tuesday. Currently there is 1 analyst who rates Care.com a buy, no analysts rate it a sell, and 2 rate it a hold.

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At the close, eLong ( LONG) was down $0.28 (1.6%) to $17.62 on light volume. Throughout the day, 6,692 shares of eLong exchanged hands as compared to its average daily volume of 61,400 shares. The stock ranged in price between $17.42-$18.09 after having opened the day at $17.96 as compared to the previous trading day's close of $17.90.

eLong, Inc. operates as an online travel service provider in the People's Republic of China. eLong has a market cap of $616.7 million and is part of the technology sector. Shares are down 12.6% year-to-date as of the close of trading on Tuesday. Currently there is 1 analyst who rates eLong a buy, no analysts rate it a sell, and none rate it a hold.

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TheStreet Ratings rates eLong as a hold. The company's strengths can be seen in multiple areas, such as its robust revenue growth, largely solid financial position with reasonable debt levels by most measures and expanding profit margins. However, as a counter to these strengths, we find that the company's return on equity has been disappointing.

Highlights from TheStreet Ratings analysis on LONG go as follows:

  • The revenue growth came in higher than the industry average of 7.3%. Since the same quarter one year prior, revenues rose by 22.3%. Growth in the company's revenue appears to have helped boost the earnings per share.
  • LONG 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. Along with this, the company maintains a quick ratio of 3.21, which clearly demonstrates the ability to cover short-term cash needs.
  • 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. Despite the fact that it has already risen in the past year, there is currently no conclusive evidence that warrants the purchase or sale of this stock.
  • ELONG INC reported significant earnings per share improvement 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, ELONG INC reported poor results of -$0.80 versus $0.00 in the prior year. This year, the market expects an improvement in earnings ($0.35 versus -$0.80).
  • 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 & Catalog Retail industry and the overall market, ELONG INC's return on equity significantly trails that of both the industry average and the S&P 500.

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

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Travelzoo ( TZOO) was another company that pushed the Internet industry lower today. Travelzoo was down $0.32 (2.0%) to $16.03 on average volume. Throughout the day, 80,660 shares of Travelzoo exchanged hands as compared to its average daily volume of 62,300 shares. The stock ranged in price between $15.80-$16.44 after having opened the day at $16.36 as compared to the previous trading day's close of $16.35.

Travelzoo Inc., an Internet media company, together with its subsidiaries, publishes travel, entertainment, and local deals from travel and entertainment companies, and local businesses in North America, Europe, and the Asia Pacific. Travelzoo has a market cap of $241.7 million and is part of the technology sector. Shares are down 23.0% year-to-date as of the close of trading on Tuesday. Currently there are no analysts who rate Travelzoo a buy, no analysts rate it a sell, and 1 rates it a hold.

TheStreet Ratings rates Travelzoo as a hold. The company's strengths can be seen in multiple areas, such as its increase in net income, largely solid financial position with reasonable debt levels by most measures and growth in earnings per share. However, as a counter to these strengths, we also find weaknesses including disappointing return on equity, weak operating cash flow and a generally disappointing performance in the stock itself.

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Highlights from TheStreet Ratings analysis on TZOO go as follows:

  • The net income growth from the same quarter one year ago has significantly exceeded that of the S&P 500 and the Internet Software & Services industry. The net income increased by 52.4% when compared to the same quarter one year prior, rising from $5.20 million to $7.92 million.
  • TZOO 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, TZOO has a quick ratio of 1.76, which demonstrates the ability of the company to cover short-term liquidity needs.
  • TRAVELZOO INC reported significant earnings per share improvement 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, TRAVELZOO INC swung to a loss, reporting -$0.33 versus $1.14 in the prior year. This year, the market expects an improvement in earnings ($0.94 versus -$0.33).
  • Net operating cash flow has significantly decreased to -$0.53 million or 105.30% when compared to the same quarter last year. In addition, when comparing to the industry average, the firm's growth rate is much lower.
  • 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, TRAVELZOO INC's return on equity significantly trails that of both the industry average and the S&P 500.

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