3 Stocks Pushing The Computer Software & Services 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 Computer Software & Services industry as a whole closed the day down 1.8% versus the S&P 500, which was down 1.6%. Laggards within the Computer Software & Services industry included Sajan ( SAJA), down 2.9%, TSR ( TSRI), down 4.8%, Kingtone Wirelessinfo Solution ( KONE), down 3.5%, Cover-All Technologies ( COVR), down 3.6% and Intelligent Systems ( INS), down 6.7%.

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

Wipro ( WIT) is one of the companies that pushed the Computer Software & Services industry lower today. Wipro was down $0.31 (2.6%) to $11.61 on light volume. Throughout the day, 305,007 shares of Wipro exchanged hands as compared to its average daily volume of 462,000 shares. The stock ranged in price between $11.56-$11.86 after having opened the day at $11.78 as compared to the previous trading day's close of $11.92.

Wipro Limited provides information technology (IT) products and services worldwide. It operates in two segments, IT Services and IT Products. Wipro has a market cap of $29.4 billion and is part of the technology sector. Shares are down 5.3% year-to-date as of the close of trading on Wednesday. Currently there are no analysts who rate Wipro a buy, no analysts rate it a sell, and 5 rate it a hold.

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TheStreet Ratings rates Wipro as a buy. 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, impressive record of earnings per share growth, increase in net income and reasonable valuation levels. Although no company is perfect, currently we do not see any significant weaknesses which are likely to detract from the generally positive outlook.

Highlights from TheStreet Ratings analysis on WIT go as follows:

  • The revenue growth came in higher than the industry average of 12.3%. Since the same quarter one year prior, revenues rose by 13.4%. This growth in revenue appears to have trickled down to the company's bottom line, improving the earnings per share.
  • WIT's debt-to-equity ratio is very low at 0.13 and is currently below that of the industry average, implying that there has been very successful management of debt levels. To add to this, WIT has a quick ratio of 2.28, which demonstrates the ability of the company to cover short-term liquidity needs.
  • WIPRO LTD has improved earnings per share by 27.3% 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, WIPRO LTD increased its bottom line by earning $0.53 versus $0.41 in the prior year. This year, the market expects an improvement in earnings ($0.58 versus $0.53).
  • The company, on the basis of net income growth from the same quarter one year ago, has significantly outperformed against the S&P 500 and exceeded that of the IT Services industry average. The net income increased by 28.4% when compared to the same quarter one year prior, rising from $272.73 million to $350.18 million.

You can view the full analysis from the report here: Wipro 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.

At the close, Cover-All Technologies ( COVR) was down $0.04 (3.6%) to $1.07 on light volume. Throughout the day, 16,735 shares of Cover-All Technologies exchanged hands as compared to its average daily volume of 27,400 shares. The stock ranged in price between $1.07-$1.10 after having opened the day at $1.07 as compared to the previous trading day's close of $1.11.

Cover-All Technologies Inc., through its subsidiary, Cover-All Systems, Inc., licenses and maintains software products for the property/casualty insurance industry in the United States and Puerto Rico. Cover-All Technologies has a market cap of $29.6 million and is part of the technology sector. Shares are down 20.7% year-to-date as of the close of trading on Wednesday.

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TheStreet Ratings rates Cover-All Technologies as a sell. The company's weaknesses can be seen in multiple areas, such as its weak operating cash flow and generally disappointing historical performance in the stock itself.

Highlights from TheStreet Ratings analysis on COVR go as follows:

  • Net operating cash flow has decreased to $1.35 million or 49.22% when compared to the same quarter last year. In addition, when comparing to the industry average, the firm's growth rate is much lower.
  • COVR has underperformed the S&P 500 Index, declining 8.67% 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.
  • 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 Software industry and the overall market, COVER-ALL TECHNOLOGIES INC's return on equity significantly trails that of both the industry average and the S&P 500.
  • 47.81% is the gross profit margin for COVER-ALL TECHNOLOGIES INC which we consider to be strong. Regardless of COVR's high profit margin, it has managed to decrease from the same period last year. Despite the mixed results of the gross profit margin, COVR's net profit margin of 6.55% is significantly lower than the industry average.
  • COVER-ALL TECHNOLOGIES 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 year. During the past fiscal year, COVER-ALL TECHNOLOGIES INC continued to lose money by earning -$0.10 versus -$0.20 in the prior year.

You can view the full analysis from the report here: Cover-All Technologies 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.

Sajan ( SAJA) was another company that pushed the Computer Software & Services industry lower today. Sajan was down $0.15 (2.9%) to $5.10 on average volume. Throughout the day, 2,299 shares of Sajan exchanged hands as compared to its average daily volume of 2,400 shares. The stock ranged in price between $5.06-$5.10 after having opened the day at $5.09 as compared to the previous trading day's close of $5.25.

Sajan has a market cap of $21.1 million and is part of the technology sector. Shares are down 9.5% year-to-date as of the close of trading on Wednesday. Currently there is 1 analyst who rates Sajan 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.

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