3 Stocks Pushing The Electronics Industry Lower

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.

The Electronics industry as a whole closed the day down 1.8% versus the S&P 500, which was down 0.7%. Laggards within the Electronics industry included LGL Group ( LGL), down 1.6%, Electro-Sensors ( ELSE), down 2.6%, Wells-Gardner Electronic ( WGA), down 2.6%, Data I/O ( DAIO), down 7.0% and Advanced Photonix ( API), down 7.5%.

TheStreet Ratings Group would like to highlight 3 stocks that pushed the industry lower today:

Advanced Photonix ( API) is one of the companies that pushed the Electronics industry lower today. Advanced Photonix was down $0.04 (7.5%) to $0.47 on average volume. Throughout the day, 95,518 shares of Advanced Photonix exchanged hands as compared to its average daily volume of 77,000 shares. The stock ranged in price between $0.46-$0.52 after having opened the day at $0.52 as compared to the previous trading day's close of $0.51.

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 $19.1 million and is part of the technology sector. Shares are down 26.1% year-to-date as of the close of trading on Tuesday. 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 21.32% 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 -24.29%.
  • 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

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At the close, Data I/O ( DAIO) was down $0.23 (7.0%) to $3.06 on average volume. Throughout the day, 11,150 shares of Data I/O exchanged hands as compared to its average daily volume of 11,900 shares. The stock ranged in price between $3.05-$3.29 after having opened the day at $3.29 as compared to the previous trading day's close of $3.29.

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 $25.1 million and is part of the technology sector. Shares are up 24.5% year-to-date as of the close of trading on Tuesday.

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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 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

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LGL Group ( LGL) was another company that pushed the Electronics industry lower today. LGL Group was down $0.06 (1.6%) to $3.73 on light volume. Throughout the day, 1,700 shares of LGL Group exchanged hands as compared to its average daily volume of 3,900 shares. The stock ranged in price between $3.66-$3.78 after having opened the day at $3.69 as compared to the previous trading day's close of $3.79.

The LGL Group, Inc., through its subsidiaries, designs, manufactures, and markets standard and custom-engineered electronic components in the United States and internationally. LGL Group has a market cap of $10.3 million and is part of the technology sector. Shares are down 29.9% year-to-date as of the close of trading on Tuesday.

TheStreet Ratings rates LGL Group 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.

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Highlights from TheStreet Ratings analysis on LGL go as follows:

  • Current return on equity is lower than its ROE from the same quarter one year prior. This is a clear sign of weakness within the company. Compared to other companies in the Electronic Equipment, Instruments & Components industry and the overall market, LGL GROUP INC's return on equity significantly trails that of both the industry average and the S&P 500.
  • The gross profit margin for LGL GROUP INC is currently lower than what is desirable, coming in at 27.40%. It has decreased from the same quarter the previous year. Along with this, the net profit margin of -21.69% is significantly below that of the industry average.
  • Net operating cash flow has significantly decreased to -$0.04 million or 108.23% when compared to the same quarter last year. In addition, when comparing to the industry average, the firm's growth rate is much lower.
  • LGL'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 37.40%, 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.
  • LGL GROUP 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, LGL GROUP INC reported poor results of -$3.16 versus -$0.51 in the prior year.

You can view the full analysis from the report here: LGL Group 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.

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