3 Stocks Pushing The Internet 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 Internet industry as a whole closed the day down 0.8% versus the S&P 500, which was up 0.5%. Laggards within the Internet industry included LookSmart ( LOOK), down 4.8%, Sify Technologies ( SIFY), down 2.3%, Synacor ( SYNC), down 3.2%, Spark Networks ( LOV), down 4.0% and MeetMe ( MEET), down 4.1%.

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

Synacor ( SYNC) is one of the companies that pushed the Internet industry lower today. Synacor was down $0.06 (3.2%) to $1.84 on light volume. Throughout the day, 31,094 shares of Synacor exchanged hands as compared to its average daily volume of 84,300 shares. The stock ranged in price between $1.78-$1.90 after having opened the day at $1.89 as compared to the previous trading day's close of $1.90.

Synacor, Inc. provides startpages and homescreens, TV Everywhere solutions, Identity Management services, and various cloud-based services across a range of devices for cable, satellite, telecom, and consumer electronics companies in the United States, and the United Kingdom. Synacor has a market cap of $50.8 million and is part of the technology sector. Shares are down 22.4% year-to-date as of the close of trading on Tuesday. Currently there are no analysts who rate Synacor a buy, 1 analyst rates it a sell, and 1 rates it a hold.

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TheStreet Ratings rates Synacor as a sell. The company's weaknesses can be seen in multiple areas, such as its feeble growth in its earnings per share, deteriorating net income, disappointing return on equity, weak operating cash flow and generally disappointing historical performance in the stock itself.

Highlights from TheStreet Ratings analysis on SYNC go as follows:

  • SYNACOR 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. Earnings per share have declined over the last two years. We anticipate that this should continue in the coming year. During the past fiscal year, SYNACOR INC swung to a loss, reporting -$0.04 versus $0.14 in the prior year. For the next year, the market is expecting a contraction of 475.0% in earnings (-$0.23 versus -$0.04).
  • The company, on the basis of change in net income from the same quarter one year ago, has significantly underperformed when compared to that of the S&P 500 and the Internet Software & Services industry. The net income has significantly decreased by 154.5% when compared to the same quarter one year ago, falling from -$0.73 million to -$1.87 million.
  • 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, SYNACOR INC'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 -$4.61 million or 942.23% when compared to the same quarter last year. In addition, when comparing to the industry average, the firm's growth rate is much lower.
  • Despite any intermediate fluctuations, we have only bad news to report on this stock's performance over the last year: it has tumbled by 26.67%, worse than the S&P 500's performance. Consistent with the plunge in the stock price, the company's earnings per share are down 250.00% compared to the year-earlier quarter. Turning toward the future, the fact that the stock has come down in price over the past year should not necessarily be interpreted as a negative; it could be one of the factors that may help make the stock attractive down the road. Right now, however, we believe that it is too soon to buy.

You can view the full analysis from the report here: Synacor Ratings Report

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At the close, Sify Technologies ( SIFY) was down $0.04 (2.3%) to $1.68 on average volume. Throughout the day, 114,067 shares of Sify Technologies exchanged hands as compared to its average daily volume of 82,200 shares. The stock ranged in price between $1.65-$1.75 after having opened the day at $1.73 as compared to the previous trading day's close of $1.72.

Sify Technologies Limited provides integrated information and communications technology solutions and services in India. Sify Technologies has a market cap of $307.1 million and is part of the technology sector. Shares are down 18.9% year-to-date as of the close of trading on Tuesday.

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 Sify Technologies as a hold. The company's strengths can be seen in multiple areas, such as its revenue growth and expanding profit margins. However, as a counter to these strengths, we also find weaknesses including a generally disappointing performance in the stock itself, feeble growth in the company's earnings per share and deteriorating net income.

Highlights from TheStreet Ratings analysis on SIFY go as follows:

  • SIFY's revenue growth trails the industry average of 28.1%. Since the same quarter one year prior, revenues rose by 11.7%. 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.
  • 40.13% is the gross profit margin for SIFY TECHNOLOGIES LTD -ADR which we consider to be strong. Regardless of SIFY's high profit margin, it has managed to decrease from the same period last year. Despite the mixed results of the gross profit margin, SIFY's net profit margin of 3.81% is significantly lower than the industry average.
  • The share price of SIFY TECHNOLOGIES LTD -ADR has not done very well: it is down 19.24% and has underperformed the S&P 500, in part reflecting the company's sharply declining earnings per share when compared to the year-earlier quarter. Looking ahead, other than the push or pull of the broad market, we do not see anything in the company's numbers that may help reverse the decline experienced over the past 12 months. Despite the past decline, the stock is still selling for more than most others in its industry.
  • SIFY TECHNOLOGIES LTD -ADR's earnings per share declined by 50.0% in the most recent quarter compared to the same quarter a year ago. The company has suffered a declining pattern earnings per share over the past two years. During the past fiscal year, SIFY TECHNOLOGIES LTD -ADR reported lower earnings of $0.04 versus $0.06 in the prior year.
  • The company, on the basis of change in net income from the same quarter one year ago, has significantly underperformed when compared to that of the S&P 500 and the Internet Software & Services industry. The net income has significantly decreased by 31.3% when compared to the same quarter one year ago, falling from $2.74 million to $1.88 million.

You can view the full analysis from the report here: Sify Technologies 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.

LookSmart ( LOOK) was another company that pushed the Internet industry lower today. LookSmart was down $0.06 (4.8%) to $1.26 on average volume. Throughout the day, 31,779 shares of LookSmart exchanged hands as compared to its average daily volume of 28,400 shares. The stock ranged in price between $1.19-$1.33 after having opened the day at $1.33 as compared to the previous trading day's close of $1.32.

LookSmart, Ltd. provides search and display advertising network solutions in the United States, Europe, the Middle East, and Africa. LookSmart has a market cap of $8.1 million and is part of the technology sector. Shares are down 31.2% year-to-date as of the close of trading on Tuesday.

TheStreet Ratings rates LookSmart as a sell. The company's weaknesses can be seen in multiple areas, such as its unimpressive growth in net income, disappointing return on equity, weak operating cash flow and generally disappointing historical performance in the stock itself.

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

Highlights from TheStreet Ratings analysis on LOOK go as follows:

  • The company, on the basis of change in net income from the same quarter one year ago, has significantly underperformed when compared to that of the S&P 500 and the Internet Software & Services industry. The net income has significantly decreased by 83.7% when compared to the same quarter one year ago, falling from -$1.01 million to -$1.86 million.
  • 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, LOOKSMART LTD'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 -$1.06 million or 69.77% when compared to the same quarter last year. In addition, when comparing to the industry average, the firm's growth rate is much lower.
  • Despite any intermediate fluctuations, we have only bad news to report on this stock's performance over the last year: it has tumbled by 35.12%, worse than the S&P 500's performance. Consistent with the plunge in the stock price, the company's earnings per share are down 77.77% compared to the year-earlier 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.
  • LOOKSMART LTD 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 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, LOOKSMART LTD continued to lose money by earning -$0.93 versus -$1.92 in the prior year.

You can view the full analysis from the report here: LookSmart 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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