3 Electronics Stocks Nudging The Industry Higher

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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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