3 Stocks Improving Performance Of The Electronics Industry

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 are trading down today with the Dow Jones Industrial Average ( ^DJI) trading down 272.52 points (-1.6%) at 16,719 as of Tuesday, Oct. 7, 2014, 4:20 PM ET. The NYSE advances/declines ratio sits at 674 issues advancing vs. 2,403 declining with 140 unchanged.

The Electronics industry as a whole closed the day down 1.6% versus the S&P 500, which was down 1.5%. Top gainers within the Electronics industry included Qualstar ( QBAK), up 3.2%, Pulse Electronics ( PULS), up 4.2%, Digital Power ( DPW), up 3.8%, Hubbell ( HUB.A), up 4.8% and Multi-Fineline Electronix ( MFLX), up 5.8%.

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

Multi-Fineline Electronix ( MFLX) is one of the companies that pushed the Electronics industry higher today. Multi-Fineline Electronix was up $0.54 (5.8%) to $9.77 on heavy volume. Throughout the day, 42,972 shares of Multi-Fineline Electronix exchanged hands as compared to its average daily volume of 22,700 shares. The stock ranged in a price between $9.17-$9.89 after having opened the day at $9.17 as compared to the previous trading day's close of $9.23.

Multi-Fineline Electronix, Inc. is engaged in the engineering, design, and manufacture of flexible printed circuit boards and related component assemblies for the electronics industry. Multi-Fineline Electronix has a market cap of $225.7 million and is part of the technology sector. Shares are down 33.5% year-to-date as of the close of trading on Monday. Currently there are no analysts who rate Multi-Fineline Electronix a buy, no analysts rate it a sell, and 1 rates 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 Multi-Fineline Electronix 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.

Highlights from TheStreet Ratings analysis on MFLX 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 Electronic Equipment, Instruments & Components industry and the overall market, MULTI-FINELINE ELECTRON INC's return on equity significantly trails that of both the industry average and the S&P 500.
  • The gross profit margin for MULTI-FINELINE ELECTRON INC is currently extremely low, coming in at 4.23%. It has decreased from the same quarter the previous year. Along with this, the net profit margin of -21.98% is significantly below that of the industry average.
  • Net operating cash flow has significantly decreased to -$24.70 million or 275.58% when compared to the same quarter last year. In addition, when comparing to the industry average, the firm's growth rate is much lower.
  • MFLX'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 41.21%, 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.
  • MFLX, with its decline in revenue, slightly underperformed the industry average of 5.8%. Since the same quarter one year prior, revenues slightly dropped by 3.9%. The declining revenue has not hurt the company's bottom line, with increasing earnings per share.

You can view the full analysis from the report here: Multi-Fineline Electronix 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, Pulse Electronics ( PULS) was up $0.05 (4.2%) to $1.25 on light volume. Throughout the day, 53,224 shares of Pulse Electronics exchanged hands as compared to its average daily volume of 95,500 shares. The stock ranged in a price between $1.13-$1.27 after having opened the day at $1.20 as compared to the previous trading day's close of $1.20.

Pulse Electronics Corporation produces and sells precision-engineered electronic components and modules. It operates in three segments: Network, Power, and Wireless. Pulse Electronics has a market cap of $20.7 million and is part of the technology sector. Shares are down 58.5% year-to-date as of the close of trading on Monday. Currently there are no analysts who rate Pulse Electronics 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 Pulse Electronics as a sell. The company's weaknesses can be seen in multiple areas, such as its unimpressive growth in net income, poor profit margins and generally disappointing historical performance in the stock itself.

Highlights from TheStreet Ratings analysis on PULS 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 Electronic Equipment, Instruments & Components industry. The net income has significantly decreased by 49.3% when compared to the same quarter one year ago, falling from -$5.23 million to -$7.81 million.
  • The gross profit margin for PULSE ELECTRONICS CORP is rather low; currently it is at 23.05%. It has decreased from the same quarter the previous year. Along with this, the net profit margin of -8.34% is significantly below that of the industry average.
  • PULS'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 69.41%, 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.
  • PULSE ELECTRONICS CORP has improved earnings per share by 30.8% 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. During the past fiscal year, PULSE ELECTRONICS CORP continued to lose money by earning -$3.39 versus -$6.60 in the prior year.
  • Net operating cash flow has significantly increased by 187.37% to $6.65 million when compared to the same quarter last year. In addition, PULSE ELECTRONICS CORP has also vastly surpassed the industry average cash flow growth rate of -22.84%.

You can view the full analysis from the report here: Pulse Electronics 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.

Qualstar ( QBAK) was another company that pushed the Electronics industry higher today. Qualstar was up $0.04 (3.2%) to $1.29 on light volume. Throughout the day, 2,137 shares of Qualstar exchanged hands as compared to its average daily volume of 17,800 shares. The stock ranged in a price between $1.26-$1.29 after having opened the day at $1.27 as compared to the previous trading day's close of $1.25.

Qualstar Corporation designs, develops, manufactures, and sells power supplies and data storage systems worldwide. The company operates in two segments, Power Supplies and Tape Libraries. Qualstar has a market cap of $15.6 million and is part of the technology sector. Shares are up 12.8% year-to-date as of the close of trading on Monday. Currently there are no analysts who rate Qualstar a buy, no analysts rate it a sell, and none rate it a hold.

TheStreet Ratings rates Qualstar as a sell. Among the areas we feel are negative, one of the most important has been poor profit margins.

Highlights from TheStreet Ratings analysis on QBAK go as follows:

  • The gross profit margin for QUALSTAR CORP is currently lower than what is desirable, coming in at 31.58%. Despite the low profit margin, it has increased significantly from the same period last year. Despite the mixed results of the gross profit margin, QBAK's net profit margin of -24.62% significantly underperformed when compared to the industry average.
  • Current return on equity exceeded its ROE from the same quarter one year prior. This is a clear sign of strength within the company. Compared to other companies in the Computers & Peripherals industry and the overall market, QUALSTAR CORP's return on equity significantly trails that of both the industry average and the S&P 500.
  • QBAK, with its decline in revenue, underperformed when compared the industry average of 9.2%. Since the same quarter one year prior, revenues slightly dropped by 4.6%. The declining revenue has not hurt the company's bottom line, with increasing earnings per share.
  • QUALSTAR CORP 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, QUALSTAR CORP continued to lose money by earning -$0.47 versus -$0.85 in the prior year.
  • The net income growth from the same quarter one year ago has significantly exceeded that of the S&P 500 and the Computers & Peripherals industry. The net income increased by 80.3% when compared to the same quarter one year prior, rising from -$3.44 million to -$0.68 million.

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