3 Computer Hardware Stocks Moving The Industry Upward

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 154 points (0.9%) at 17,210 as of Wednesday, Sept. 24, 2014, 4:20 PM ET. The NYSE advances/declines ratio sits at 1,794 issues advancing vs. 1,244 declining with 169 unchanged.

The Computer Hardware industry as a whole closed the day up 0.2% versus the S&P 500, which was up 0.8%. Top gainers within the Computer Hardware industry included Mad Catz Interactive ( MCZ), up 1.6%, China TechFaith Wireless Comm Tech ( CNTF), up 1.6%, Dataram ( DRAM), up 3.4%, Silver Spring Networks ( SSNI), up 3.6% and Silicom ( SILC), up 2.2%.

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

Silver Spring Networks ( SSNI) is one of the companies that pushed the Computer Hardware industry higher today. Silver Spring Networks was up $0.33 (3.6%) to $9.36 on average volume. Throughout the day, 226,736 shares of Silver Spring Networks exchanged hands as compared to its average daily volume of 273,900 shares. The stock ranged in a price between $9.10-$9.38 after having opened the day at $9.15 as compared to the previous trading day's close of $9.03.

Silver Spring Networks has a market cap of $439.4 million and is part of the technology sector. Shares are down 57.0% year-to-date as of the close of trading on Tuesday.

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, China TechFaith Wireless Comm Tech ( CNTF) was up $0.02 (1.6%) to $1.29 on average volume. Throughout the day, 58,522 shares of China TechFaith Wireless Comm Tech exchanged hands as compared to its average daily volume of 75,600 shares. The stock ranged in a price between $1.26-$1.30 after having opened the day at $1.27 as compared to the previous trading day's close of $1.27.

China Techfaith Wireless Communication Technology Limited is engaged in the original design, development, and sale of mobile handsets in the People's Republic of China and internationally. China TechFaith Wireless Comm Tech has a market cap of $67.0 million and is part of the technology sector. Shares are down 24.2% year-to-date as of the close of trading on Tuesday. Currently there are no analysts who rate China TechFaith Wireless Comm Tech 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 China TechFaith Wireless Comm Tech as a sell. The company's weaknesses can be seen in multiple areas, such as its deteriorating net income, disappointing return on equity and poor profit margins.

Highlights from TheStreet Ratings analysis on CNTF 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 Computers & Peripherals industry. The net income has significantly decreased by 114.9% when compared to the same quarter one year ago, falling from -$0.97 million to -$2.09 million.
  • 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 Computers & Peripherals industry and the overall market, CHINA TECHFAITH WIRELESS-ADR's return on equity significantly trails that of both the industry average and the S&P 500.
  • The gross profit margin for CHINA TECHFAITH WIRELESS-ADR is currently extremely low, coming in at 11.43%. It has decreased from the same quarter the previous year. Along with this, the net profit margin of -8.76% is significantly below that of the industry average.
  • The revenue fell significantly faster than the industry average of 9.3%. Since the same quarter one year prior, revenues fell by 22.3%. The declining revenue appears to have seeped down to the company's bottom line, decreasing earnings per share.
  • CHINA TECHFAITH WIRELESS-ADR has experienced a steep decline in earnings per share in the most recent quarter in comparison to its performance from the same quarter a year ago. Stable Earnings per share over the past year indicate the company has sound management over its earnings and share float. During the past fiscal year, CHINA TECHFAITH WIRELESS-ADR continued to lose money by earning -$0.05 versus -$0.06 in the prior year.

You can view the full analysis from the report here: China TechFaith Wireless Comm Tech 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.

Mad Catz Interactive ( MCZ) was another company that pushed the Computer Hardware industry higher today. Mad Catz Interactive was up $0.01 (1.6%) to $0.50 on light volume. Throughout the day, 90,772 shares of Mad Catz Interactive exchanged hands as compared to its average daily volume of 134,700 shares. The stock ranged in a price between $0.50-$0.51 after having opened the day at $0.50 as compared to the previous trading day's close of $0.50.

Mad Catz Interactive, Inc. designs, manufactures, markets, sells, and distributes various entertainment products in the United States and internationally. Mad Catz Interactive has a market cap of $31.7 million and is part of the technology sector. Shares are down 3.8% year-to-date as of the close of trading on Tuesday. Currently there are no analysts who rate Mad Catz Interactive a buy, no analysts rate it a sell, and none rate it a hold.

TheStreet Ratings rates Mad Catz Interactive as a sell. The company's weaknesses can be seen in multiple areas, such as its poor profit margins and generally disappointing historical performance in the stock itself.

Highlights from TheStreet Ratings analysis on MCZ go as follows:

  • The gross profit margin for MAD CATZ INTERACTIVE INC is currently lower than what is desirable, coming in at 32.57%. Regardless of MCZ's low profit margin, it has managed to increase from the same period last year. Despite the mixed results of the gross profit margin, MCZ's net profit margin of -7.43% significantly underperformed when compared to the industry average.
  • MCZ'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 28.17%, 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.
  • 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 Household Durables industry and the overall market, MAD CATZ INTERACTIVE INC's return on equity significantly trails that of both the industry average and the S&P 500.
  • MCZ, with its decline in revenue, slightly underperformed the industry average of 5.3%. Since the same quarter one year prior, revenues fell by 10.4%. The declining revenue has not hurt the company's bottom line, with increasing earnings per share.
  • The debt-to-equity ratio is somewhat low, currently at 0.87, and is less than that of the industry average, implying that there has been a relatively successful effort in the management of debt levels. Even though the company has a strong debt-to-equity ratio, the quick ratio of 0.45 is very weak and demonstrates a lack of ability to pay short-term obligations.

You can view the full analysis from the report here: Mad Catz Interactive 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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