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.

All three major indices traded up today with the Dow Jones Industrial Average ( ^DJI) trading up 215 points (1.3%) at 16,615 as of Tuesday, Oct. 21, 2014, 4:20 PM ET. The NYSE advances/declines ratio sits at 2,585 issues advancing vs. 535 declining with 105 unchanged.

The Electronics industry as a whole closed the day up 1.9% versus the S&P 500, which was up 2.0%. Top gainers within the Electronics industry included Data I/O ( DAIO), up 2.8%, SMTC ( SMTX), up 1.8%, BTU International ( BTUI), up 14.7%, GigOptix ( GIG), up 1.9% and ASM International ( ASMI), up 1.5%.

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

BTU International ( BTUI) is one of the companies that pushed the Electronics industry higher today. BTU International was up $0.41 (14.7%) to $3.20 on average volume. Throughout the day, 30,345 shares of BTU International exchanged hands as compared to its average daily volume of 21,600 shares. The stock ranged in a price between $2.84-$3.24 after having opened the day at $2.87 as compared to the previous trading day's close of $2.79.

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 $27.6 million and is part of the industrial goods sector. Shares are down 4.3% year-to-date as of the close of trading on Monday. Currently there are no analysts who rate BTU International a buy, no analysts rate it a sell, and none rate it a hold.

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TheStreet Ratings rates BTU International as a sell. The company's weaknesses can be seen in multiple areas, such as its disappointing return on equity and generally disappointing historical performance in the stock itself.

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.
  • BTUI has underperformed the S&P 500 Index, declining 17.96% 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.
  • 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.
  • 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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At the close, SMTC ( SMTX) was up $0.03 (1.8%) to $1.71 on heavy volume. Throughout the day, 105,016 shares of SMTC exchanged hands as compared to its average daily volume of 26,600 shares. The stock ranged in a price between $1.58-$1.71 after having opened the day at $1.69 as compared to the previous trading day's close of $1.68.

SMTC Corporation provides advanced electronics manufacturing services worldwide. SMTC has a market cap of $27.3 million and is part of the industrial goods sector. Shares are down 28.5% year-to-date as of the close of trading on Monday. Currently there are no analysts who rate SMTC 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 SMTC as a sell. The company's weaknesses can be seen in multiple areas, such as its disappointing return on equity, weak operating cash flow, generally disappointing historical performance in the stock itself, generally high debt management risk and poor profit margins.

Highlights from TheStreet Ratings analysis on SMTX 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, SMTC CORP's return on equity significantly trails that of both the industry average and the S&P 500.
  • Net operating cash flow has significantly decreased to -$1.07 million or 111.27% when compared to the same quarter last year. In addition, when comparing to the industry average, the firm's growth rate is much lower.
  • SMTX has underperformed the S&P 500 Index, declining 17.09% 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.
  • SMTX's debt-to-equity ratio of 0.81 is somewhat low overall, but it is high when compared to the industry average, implying that the management of the debt levels should be evaluated further. Despite the fact that SMTX's debt-to-equity ratio is mixed in its results, the company's quick ratio of 0.53 is low and demonstrates weak liquidity.
  • The gross profit margin for SMTC CORP is currently extremely low, coming in at 11.65%. Regardless of SMTX's low profit margin, it has managed to increase from the same period last year. Despite the mixed results of the gross profit margin, the net profit margin of 0.05% trails the industry average.

You can view the full analysis from the report here: SMTC 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.

Data I/O ( DAIO) was another company that pushed the Electronics industry higher today. Data I/O was up $0.09 (2.8%) to $3.29 on light volume. Throughout the day, 3,667 shares of Data I/O exchanged hands as compared to its average daily volume of 13,600 shares. The stock ranged in a price between $3.20-$3.52 after having opened the day at $3.20 as compared to the previous trading day's close of $3.20.

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 industrial goods sector. Shares are up 17.1% year-to-date as of the close of trading on Monday. Currently there are no analysts who rate Data I/O a buy, no analysts rate it a sell, and none rate it a hold.

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 find that we feel that the company's cash flow from its operations has been weak overall.

Highlights from TheStreet Ratings analysis on DAIO go as follows:

  • DAIO's revenue growth has slightly outpaced the industry average of 5.7%. 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.
  • The company's current return on equity greatly increased when compared to its ROE from the same quarter one year prior. This is a signal of significant strength within the corporation. Compared to other companies in the Electronic Equipment, Instruments & Components industry and the overall market, DATA I/O CORP's return on equity significantly trails that of both the industry average and the S&P 500.
  • 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

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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