3 Stocks Improving Performance Of The Electronics Industry

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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.

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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

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