3 Stocks Boosting The Computer Hardware 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.

Two out of the three major indices are trading lower today with the Dow Jones Industrial Average ( ^DJI) trading down 13.23 points (-0.1%) at 17,602 as of Wednesday, Nov. 12, 2014, 3:25 PM ET. The NYSE advances/declines ratio sits at 1,590 issues advancing vs. 1,414 declining with 161 unchanged.

The Computer Hardware industry as a whole closed the day up 0.2% versus the S&P 500, which was down 0.1%. Top gainers within the Computer Hardware industry included Interphase ( INPH), up 2.3%, Pangaea Logistics Solutions ( PANL), up 27.7%, Quantum ( QTM), up 3.1%, Black Box ( BBOX), up 1.8% and Daktronics ( DAKT), up 1.6%.

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

Quantum ( QTM) is one of the companies that pushed the Computer Hardware industry higher today. Quantum was up $0.04 (3.1%) to $1.50 on heavy volume. Throughout the day, 1,356,241 shares of Quantum exchanged hands as compared to its average daily volume of 862,000 shares. The stock ranged in a price between $1.41-$1.50 after having opened the day at $1.43 as compared to the previous trading day's close of $1.45.

Quantum Corporation provides scale-out storage, archive, and data protection solutions for small businesses to major enterprises in the Americas, Europe, and the Asia Pacific. Quantum has a market cap of $370.6 million and is part of the technology sector. Shares are up 20.8% year-to-date as of the close of trading on Tuesday. Currently there are 2 analysts who rate Quantum a buy, no analysts rate it a sell, and 1 rates it a hold.

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TheStreet Ratings rates Quantum as a sell. The area that we feel has been the company's primary weakness has been its poor profit margins.

Highlights from TheStreet Ratings analysis on QTM go as follows:

  • 47.53% is the gross profit margin for QUANTUM CORP 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, QTM's net profit margin of 0.92% significantly trails the industry average.
  • Net operating cash flow has significantly increased by 340.95% to $2.28 million when compared to the same quarter last year. In addition, QUANTUM CORP has also vastly surpassed the industry average cash flow growth rate of 35.84%.
  • Compared to where it was a year ago today, the stock is now trading at a higher level, and has traded in line with the S&P 500. Turning our attention to the future direction of the stock, we do not believe this stock offers ample reward opportunity to compensate for the risks, despite the fact that it rose over the past year.
  • QUANTUM CORP reported significant earnings per share improvement in the most recent quarter compared to the same quarter a year ago. The company has demonstrated a pattern of positive earnings per share growth over the past year. We feel that this trend should continue. This trend suggests that the performance of the business is improving. During the past fiscal year, QUANTUM CORP continued to lose money by earning -$0.09 versus -$0.22 in the prior year. This year, the market expects an improvement in earnings ($0.09 versus -$0.09).
  • The net income growth from the same quarter one year ago has significantly exceeded that of the S&P 500 and the Computers & Peripherals industry. The net income increased by 115.8% when compared to the same quarter one year prior, rising from -$7.89 million to $1.25 million.

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

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At the close, Pangaea Logistics Solutions ( PANL) was up $1.39 (27.7%) to $6.40 on heavy volume. Throughout the day, 38,483 shares of Pangaea Logistics Solutions exchanged hands as compared to its average daily volume of 17,300 shares. The stock ranged in a price between $5.10-$6.85 after having opened the day at $5.10 as compared to the previous trading day's close of $5.01.

Pangaea Logistics Solutions has a market cap of $64.9 million and is part of the technology sector. Shares are down 47.9% 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.

Interphase ( INPH) was another company that pushed the Computer Hardware industry higher today. Interphase was up $0.07 (2.3%) to $3.00 on average volume. Throughout the day, 11,290 shares of Interphase exchanged hands as compared to its average daily volume of 12,000 shares. The stock ranged in a price between $2.66-$3.10 after having opened the day at $2.69 as compared to the previous trading day's close of $2.93.

Interphase Corporation, an information and communications technology company, provides connectivity, interworking, and packet processing solutions in the Pacific Rim, North America, and Europe. Interphase has a market cap of $25.1 million and is part of the technology sector. Shares are down 22.5% year-to-date as of the close of trading on Tuesday. Currently there are no analysts who rate Interphase a buy, no analysts rate it a sell, and none rate it a hold.

TheStreet Ratings rates Interphase as a sell. The company's weaknesses can be seen in multiple areas, such as its unimpressive growth in net income, poor profit margins and generally disappointing historical performance in the stock itself.

Highlights from TheStreet Ratings analysis on INPH 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 Communications Equipment industry. The net income has significantly decreased by 26.0% when compared to the same quarter one year ago, falling from -$0.90 million to -$1.13 million.
  • The gross profit margin for INTERPHASE CORP is currently lower than what is desirable, coming in at 30.75%. It has decreased from the same quarter the previous year. Along with this, the net profit margin of -34.58% is significantly below that of the industry average.
  • Looking at the price performance of INPH's shares over the past 12 months, there is not much good news to report: the stock is down 32.71%, and it has underformed the S&P 500 Index. In addition, the company's earnings per share are lower today than 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.
  • Current return on equity exceeded its ROE from the same quarter one year prior. This is a clear sign of strength within the company. Compared to other companies in the Communications Equipment industry and the overall market, INTERPHASE CORP's return on equity significantly trails that of both the industry average and the S&P 500.
  • INTERPHASE CORP's earnings per share declined by 23.1% 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, INTERPHASE CORP continued to lose money by earning -$0.39 versus -$0.54 in the prior year.

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