3 Technology Stocks Pushing Sector Growth

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.

Two out of the three major indices are trading lower today with the Dow Jones Industrial Average ( ^DJI) trading up 27 points (0.2%) at 17,393 as of Tuesday, Nov. 4, 2014, 3:25 PM ET. The NYSE advances/declines ratio sits at 1,085 issues advancing vs. 1,951 declining with 143 unchanged.

The Technology sector as a whole closed the day down 0.1% versus the S&P 500, which was down 0.3%. Top gainers within the Technology sector included TigerLogic ( TIGR), up 8.0%, Bridgeline Digital ( BLIN), up 8.4%, Bel Fuse ( BELFA), up 3.1%, Optical Cable ( OCC), up 1.6% and ARI Network Services ( ARIS), up 5.1%.

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

ARI Network Services ( ARIS) is one of the companies that pushed the Technology sector higher today. ARI Network Services was up $0.17 (5.1%) to $3.50 on light volume. Throughout the day, 504 shares of ARI Network Services exchanged hands as compared to its average daily volume of 11,200 shares. The stock ranged in a price between $3.21-$3.50 after having opened the day at $3.21 as compared to the previous trading day's close of $3.33.

ARI Network Services has a market cap of $49.1 million and is part of the retail industry. Shares are up 2.4% year-to-date as of the close of trading on Monday.

STOCKS TO BUY: TheStreet Quant Ratings has identified a handful of stocks that can potentially TRIPLE in the next 12 months. Learn more.

At the close, Bel Fuse ( BELFA) was up $0.80 (3.1%) to $26.70 on light volume. Throughout the day, 100 shares of Bel Fuse exchanged hands as compared to its average daily volume of 1,000 shares. The stock ranged in a price between $26.70-$26.70 after having opened the day at $26.70 as compared to the previous trading day's close of $25.90.

Bel Fuse Inc. designs, manufactures, and sells products used in the networking, telecommunication, high-speed data transmission, commercial aerospace, military, broadcasting, transportation, and consumer electronic industries worldwide. Bel Fuse has a market cap of $54.5 million and is part of the retail industry. Shares are up 29.0% year-to-date as of the close of trading on Monday. Currently there are no analysts who rate Bel Fuse 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 Bel Fuse as a buy. The company's strengths can be seen in multiple areas, such as its robust revenue growth, reasonable valuation levels, solid stock price performance and notable return on equity. We feel these strengths outweigh the fact that the company has had sub par growth in net income.

Highlights from TheStreet Ratings analysis on BELFA go as follows:

  • BELFA's very impressive revenue growth greatly exceeded the industry average of 3.0%. Since the same quarter one year prior, revenues leaped by 54.5%. This growth in revenue does not appear to have trickled down to the company's bottom line, displayed by a decline in earnings per share.
  • Looking at where the stock is today compared to one year ago, we find that it is not only higher, but it has also clearly outperformed the rise in the S&P 500 over the same period, despite the company's weak earnings results. Looking ahead, unless broad bear market conditions prevail, we still see more upside potential for this stock, despite the fact that it has already risen over the past year.
  • BEL FUSE INC has experienced a steep decline in earnings per share in the most recent quarter in comparison to its performance from the same quarter a year ago. This company has reported somewhat volatile earnings recently. But, we feel it is poised for EPS growth in the coming year. During the past fiscal year, BEL FUSE INC increased its bottom line by earning $1.39 versus $0.19 in the prior year. This year, the market expects an improvement in earnings ($1.93 versus $1.39).
  • 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. When compared to other companies in the Communications Equipment industry and the overall market, BEL FUSE INC's return on equity is below that of both the industry average and the S&P 500.

You can view the full analysis from the report here: Bel Fuse 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.

Bridgeline Digital ( BLIN) was another company that pushed the Technology sector higher today. Bridgeline Digital was up $0.05 (8.4%) to $0.68 on heavy volume. Throughout the day, 101,435 shares of Bridgeline Digital exchanged hands as compared to its average daily volume of 28,400 shares. The stock ranged in a price between $0.63-$0.75 after having opened the day at $0.63 as compared to the previous trading day's close of $0.63.

Bridgeline Digital, Inc. develops iAPPS Web engagement management product platform and related digital solutions in the United States. Its iAPPS platform enables companies and developers to create Websites, Web applications, and online stores. Bridgeline Digital has a market cap of $14.2 million and is part of the retail industry. Shares are down 38.7% year-to-date as of the close of trading on Monday. Currently there is 1 analyst who rates Bridgeline Digital a buy, no analysts rate it a sell, and none rate it a hold.

TheStreet Ratings rates Bridgeline Digital as a sell. The company's weaknesses can be seen in multiple areas, such as its disappointing return on equity, generally disappointing historical performance in the stock itself and feeble growth in its earnings per share.

Highlights from TheStreet Ratings analysis on BLIN 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 Internet Software & Services industry and the overall market, BRIDGELINE DIGITAL INC's return on equity significantly trails that of both the industry average and the S&P 500.
  • BLIN has underperformed the S&P 500 Index, declining 12.95% 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.
  • BRIDGELINE DIGITAL INC has improved earnings per share by 40.0% in the most recent quarter compared to the same quarter a year ago. This company has reported somewhat volatile earnings recently. We feel it is likely to report a decline in earnings in the coming year. During the past fiscal year, BRIDGELINE DIGITAL INC reported poor results of -$0.23 versus -$0.07 in the prior year. For the next year, the market is expecting a contraction of 26.1% in earnings (-$0.29 versus -$0.23).
  • Despite currently having a low debt-to-equity ratio of 0.31, it is higher than that of the industry average, inferring that management of debt levels may need to be evaluated further. Regardless of the somewhat mixed results with the debt-to-equity ratio, the company's quick ratio of 0.95 is weak.
  • Net operating cash flow has increased to -$1.22 million or 14.87% when compared to the same quarter last year. Despite an increase in cash flow, BRIDGELINE DIGITAL INC's cash flow growth rate is still lower than the industry average growth rate of 26.90%.

You can view the full analysis from the report here: Bridgeline Digital 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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