3 Stocks Pushing The Electronics Industry Lower

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The Electronics industry as a whole closed the day down 0.6% versus the S&P 500, which was down 0.6%. Laggards within the Electronics industry included LGL Group ( LGL), down 5.0%, Wells-Gardner Electronic ( WGA), down 5.7%, Bel Fuse ( BELFA), down 3.4%, Data I/O ( DAIO), down 4.2% and Advanced Photonix ( API), down 6.4%.

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

Data I/O ( DAIO) is one of the companies that pushed the Electronics industry lower today. Data I/O was down $0.14 (4.2%) to $3.18 on average volume. Throughout the day, 12,380 shares of Data I/O exchanged hands as compared to its average daily volume of 13,700 shares. The stock ranged in price between $3.18-$3.33 after having opened the day at $3.30 as compared to the previous trading day's close of $3.32.

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 $25.9 million and is part of the technology sector. Shares are up 29.2% year-to-date as of the close of trading on Monday.

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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 3.5%. 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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At the close, Bel Fuse ( BELFA) was down $0.82 (3.4%) to $23.58 on heavy volume. Throughout the day, 1,837 shares of Bel Fuse exchanged hands as compared to its average daily volume of 1,200 shares. The stock ranged in price between $23.51-$23.76 after having opened the day at $23.76 as compared to the previous trading day's close of $24.40.

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 $52.5 million and is part of the technology sector. Shares are up 24.2% year-to-date as of the close of trading on Monday.

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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 4.0%. 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 37.13% 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 ($1.54 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

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LGL Group ( LGL) was another company that pushed the Electronics industry lower today. LGL Group was down $0.22 (5.0%) to $4.20 on heavy volume. Throughout the day, 14,063 shares of LGL Group exchanged hands as compared to its average daily volume of 3,900 shares. The stock ranged in price between $3.94-$4.31 after having opened the day at $4.28 as compared to the previous trading day's close of $4.42.

The LGL Group, Inc., through its subsidiaries, designs, manufactures, and markets standard and custom-engineered electronic components in the United States and internationally. LGL Group has a market cap of $11.3 million and is part of the technology sector. Shares are down 19.4% year-to-date as of the close of trading on Monday.

TheStreet Ratings rates LGL Group as a sell. The company's weaknesses can be seen in multiple areas, such as its disappointing return on equity, poor profit margins, weak operating cash flow and generally disappointing historical performance in the stock itself.

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Highlights from TheStreet Ratings analysis on LGL go as follows:

  • Current return on equity is lower than its ROE from the same quarter one year prior. This is a clear sign of weakness within the company. Compared to other companies in the Electronic Equipment, Instruments & Components industry and the overall market, LGL GROUP INC's return on equity significantly trails that of both the industry average and the S&P 500.
  • The gross profit margin for LGL GROUP INC is currently lower than what is desirable, coming in at 27.40%. It has decreased from the same quarter the previous year. Along with this, the net profit margin of -21.69% is significantly below that of the industry average.
  • Net operating cash flow has significantly decreased to -$0.04 million or 108.23% when compared to the same quarter last year. In addition, when comparing to the industry average, the firm's growth rate is much lower.
  • LGL has underperformed the S&P 500 Index, declining 22.27% 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.
  • LGL GROUP INC reported significant earnings per share improvement 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, LGL GROUP INC reported poor results of -$3.16 versus -$0.51 in the prior year.

You can view the full analysis from the report here: LGL Group 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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