3 Stocks Pushing The Electronics 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 Electronics industry as a whole closed the day down 0.9% versus the S&P 500, which was down 0.3%. Laggards within the Electronics industry included Wells-Gardner Electronic ( WGA), down 3.3%, Aetrium ( ATRM), down 3.6%, Trio-Tech International ( TRT), down 4.9%, Eltek ( ELTK), down 3.1% and BTU International ( BTUI), down 1.8%.

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

Freescale Semiconductor ( FSL) is one of the companies that pushed the Electronics industry lower today. Freescale Semiconductor was down $0.85 (4.2%) to $19.53 on heavy volume. Throughout the day, 4,513,409 shares of Freescale Semiconductor exchanged hands as compared to its average daily volume of 1,814,000 shares. The stock ranged in price between $19.32-$20.43 after having opened the day at $20.38 as compared to the previous trading day's close of $20.38.

Freescale Semiconductor, Ltd. provides embedded processing solutions for automotive, networking, industrial, and consumer markets worldwide. Freescale Semiconductor has a market cap of $6.3 billion and is part of the technology sector. Shares are up 27.0% year-to-date as of the close of trading on Monday. Currently there are 5 analysts who rate Freescale Semiconductor a buy, no analysts rate it a sell, and 6 rate it a hold.

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TheStreet Ratings rates Freescale Semiconductor as a hold. The company's strengths can be seen in multiple areas, such as its revenue growth, solid stock price performance and compelling growth in net income. However, as a counter to these strengths, we find that the growth in the company's earnings per share has not been good.

Highlights from TheStreet Ratings analysis on FSL go as follows:

  • FSL's revenue growth has slightly outpaced the industry average of 10.3%. Since the same quarter one year prior, revenues rose by 14.7%. Growth in the company's revenue appears to have helped boost the earnings per share.
  • Looking at where the stock is today compared to one year ago, we find that it is not only higher, but it has also clearly outperformed the rise in the S&P 500 over the same period. Although other factors naturally played a role, the company's strong earnings growth was key. 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.
  • 48.61% is the gross profit margin for FREESCALE SEMICONDUCTOR LTD which we consider to be strong. It has increased from the same quarter the previous year. Despite the strong results of the gross profit margin, FSL's net profit margin of 7.22% significantly trails the industry average.
  • FREESCALE SEMICONDUCTOR LTD 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, FREESCALE SEMICONDUCTOR LTD reported poor results of -$0.81 versus -$0.42 in the prior year. This year, the market expects an improvement in earnings ($1.50 versus -$0.81).

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

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At the close, BTU International ( BTUI) was down $0.06 (1.8%) to $3.25 on heavy volume. Throughout the day, 34,619 shares of BTU International exchanged hands as compared to its average daily volume of 21,700 shares. The stock ranged in price between $3.25-$3.36 after having opened the day at $3.30 as compared to the previous trading day's close of $3.31.

BTU International, Inc. designs, manufactures, sells, and services thermal processing equipment and related process controls for use in the electronics, alternative energy, automotive, and other industries worldwide. BTU International has a market cap of $32.0 million and is part of the technology sector. Shares are up 10.0% year-to-date as of the close of trading on Monday.

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TheStreet Ratings rates BTU International as a sell. Among the areas we feel are negative, one of the most important has been an overall disappointing return on equity.

Highlights from TheStreet Ratings analysis on BTUI go as follows:

  • 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 Semiconductors & Semiconductor Equipment industry and the overall market, BTU INTERNATIONAL INC's return on equity significantly trails that of both the industry average and the S&P 500.
  • BTU INTERNATIONAL 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, BTU INTERNATIONAL INC reported poor results of -$1.21 versus -$1.16 in the prior year.
  • 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. Turning our attention to the future direction of the stock, we do not believe this stock offers ample reward opportunity to compensate for the risks, despite the fact that it rose over the past year.
  • Despite currently having a low debt-to-equity ratio of 0.41, it is higher than that of the industry average, inferring that management of debt levels may need to be evaluated further. Despite the fact that BTUI's debt-to-equity ratio is mixed in its results, the company's quick ratio of 1.52 is high and demonstrates strong liquidity.
  • 43.75% is the gross profit margin for BTU INTERNATIONAL INC which we consider to be strong. It has increased from the same quarter the previous year. Despite the strong results of the gross profit margin, BTUI's net profit margin of 3.61% significantly trails the industry average.

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

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Aetrium ( ATRM) was another company that pushed the Electronics industry lower today. Aetrium was down $0.16 (3.6%) to $4.30 on light volume. Throughout the day, 973 shares of Aetrium exchanged hands as compared to its average daily volume of 6,500 shares. The stock ranged in price between $4.30-$4.42 after having opened the day at $4.42 as compared to the previous trading day's close of $4.46.

Aetrium has a market cap of $4.8 million and is part of the technology sector. Shares are down 33.2% year-to-date as of the close of trading on Monday.

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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