3 Electronics Stocks Nudging The Industry Higher

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.

One out of the three major indices traded up today The three major indices are trading lower today with the Dow Jones Industrial Average ( ^DJI) trading down 24.50 points (-0.2%) at 16,117 as of Thursday, Oct. 16, 2014, 4:20 PM ET. The NYSE advances/declines ratio sits at 2,202 issues advancing vs. 904 declining with 116 unchanged.

The Electronics industry as a whole closed the day up 2.0% versus the S&P 500, which was unchanged. Top gainers within the Electronics industry included Qualstar ( QBAK), up 3.3%, Advanced Photonix ( API), up 2.1%, Forward Industries ( FORD), up 3.2%, Data I/O ( DAIO), up 2.0% and SMTC ( SMTX), up 1.9%.

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

Data I/O ( DAIO) is one of the companies that pushed the Electronics industry higher today. Data I/O was up $0.06 (2.0%) to $3.10 on light volume. Throughout the day, 4,450 shares of Data I/O exchanged hands as compared to its average daily volume of 14,100 shares. The stock ranged in a price between $3.05-$3.15 after having opened the day at $3.05 as compared to the previous trading day's close of $3.04.

Data I/O Corporation designs, manufactures, and sells programming systems for electronic device manufacturers worldwide. The company's programming system products are used to program integrated circuits (ICs) with the specific data necessary for the ICs. Data I/O has a market cap of $23.6 million and is part of the technology sector. Shares are up 18.3% year-to-date as of the close of trading on Wednesday. Currently there are no analysts who rate Data I/O a buy, no analysts rate it a sell, and none rate it a hold.

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TheStreet Ratings rates Data I/O as a hold. 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 and compelling growth in net income. However, as a counter to these strengths, we also find weaknesses including weak operating cash flow and a generally disappointing performance in the stock itself.

Highlights from TheStreet Ratings analysis on DAIO go as follows:

  • DAIO's revenue growth has slightly outpaced the industry average of 5.8%. Since the same quarter one year prior, revenues slightly increased by 6.2%. Growth in the company's revenue appears to have helped boost the earnings per share.
  • DAIO has no debt to speak of therefore resulting in a debt-to-equity ratio of zero, which we consider to be a relatively favorable sign. To add to this, DAIO has a quick ratio of 2.37, which demonstrates the ability of the company to cover short-term liquidity needs.
  • The gross profit margin for DATA I/O CORP is rather high; currently it is at 56.83%. Regardless of DAIO's high profit margin, it has managed to decrease from the same period last year. Despite the mixed results of the gross profit margin, DAIO's net profit margin of 7.98% compares favorably to the industry average.
  • In its most recent trading session, DAIO has closed at a price level that was not very different from its closing price of one year earlier. This is probably due to its weak earnings growth as well as other mixed factors. 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.
  • Net operating cash flow has significantly decreased to $0.02 million or 94.58% when compared to the same quarter last year. In addition, when comparing to the industry average, the firm's growth rate is much lower.

You can view the full analysis from the report here: Data I/O Ratings Report

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At the close, Advanced Photonix ( API) was up $0.01 (2.1%) to $0.48 on light volume. Throughout the day, 51,880 shares of Advanced Photonix exchanged hands as compared to its average daily volume of 81,300 shares. The stock ranged in a price between $0.48-$0.50 after having opened the day at $0.48 as compared to the previous trading day's close of $0.47.

Advanced Photonix, Inc. develops, manufactures, and sells optoelectronic devices, and value-added sub-systems and systems to various original equipment manufacturers primarily in North America, Asia, Europe, and Australia. Advanced Photonix has a market cap of $18.0 million and is part of the technology sector. Shares are down 31.9% year-to-date as of the close of trading on Wednesday. Currently there is 1 analyst who rates Advanced Photonix a buy, no analysts rate it a sell, and none rate it a hold.

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

Highlights from TheStreet Ratings analysis on API go as follows:

  • API has underperformed the S&P 500 Index, declining 16.13% 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.
  • Net operating cash flow has decreased to -$0.51 million or 10.36% when compared to the same quarter last year. Despite a decrease in cash flow ADVANCED PHOTONIX INC is still fairing well by exceeding its industry average cash flow growth rate of -23.23%.
  • The return on equity has improved slightly when compared to the same quarter one year prior. This can be construed as a modest strength in the organization. Compared to other companies in the Electronic Equipment, Instruments & Components industry and the overall market, ADVANCED PHOTONIX INC's return on equity significantly trails that of both the industry average and the S&P 500.
  • ADVANCED PHOTONIX INC reported significant earnings per share improvement in the most recent quarter compared to 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. However, the consensus estimates suggest that there will be an upward trend in the coming year. During the past fiscal year, ADVANCED PHOTONIX INC reported poor results of -$0.14 versus -$0.13 in the prior year. This year, the market expects an improvement in earnings ($0.02 versus -$0.14).
  • 40.36% is the gross profit margin for ADVANCED PHOTONIX INC which we consider to be strong. Regardless of API's high profit margin, it has managed to decrease from the same period last year. Despite the mixed results of the gross profit margin, the net profit margin of -3.49% trails the industry average.

You can view the full analysis from the report here: Advanced Photonix 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 (3.3%) to $1.24 on average volume. Throughout the day, 19,791 shares of Qualstar exchanged hands as compared to its average daily volume of 19,600 shares. The stock ranged in a price between $1.20-$1.24 after having opened the day at $1.20 as compared to the previous trading day's close of $1.20.

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 $15.7 million and is part of the technology sector. Shares are up 13.3% year-to-date as of the close of trading on Wednesday. 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. 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 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.
  • In its most recent trading session, QBAK has closed at a price level that was not very different from its closing price of one year earlier. This is probably due to its weak earnings growth as well as other mixed factors. 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.
  • 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.

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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