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The Technology sector as a whole closed the day up 0.7% versus the S&P 500, which was unchanged. Laggards within the Technology sector included Electro-Sensors ( ELSE), down 2.9%, Cover-All Technologies ( COVR), down 8.7%, Internet Initiative Japan ( IIJI), down 2.1%, Astea International ( ATEA), down 4.5% and Frequency Electronics ( FEIM), down 4.2%.

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

Frequency Electronics ( FEIM) is one of the companies that pushed the Technology sector lower today. Frequency Electronics was down $0.46 (4.2%) to $10.41 on average volume. Throughout the day, 5,212 shares of Frequency Electronics exchanged hands as compared to its average daily volume of 5,500 shares. The stock ranged in price between $10.41-$11.08 after having opened the day at $11.08 as compared to the previous trading day's close of $10.87.

Frequency Electronics, Inc., together with its subsidiaries, designs, develops, and manufactures precision time and frequency control products and components for microwave integrated circuit applications. It operates in three segments: FEI-NY, Gillam-FEI, and FEI-Zyfer. Frequency Electronics has a market cap of $91.1 million and is part of the computer software & services industry. Shares are down 9.1% year-to-date as of the close of trading on Thursday.

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TheStreet Ratings rates Frequency Electronics as a buy. 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, increase in net income and notable return on equity. We feel these strengths outweigh the fact that the company shows low profit margins.

Highlights from TheStreet Ratings analysis on FEIM go as follows:

  • The revenue growth came in higher than the industry average of 3.7%. Since the same quarter one year prior, revenues rose by 17.3%. This growth in revenue does not appear to have trickled down to the company's bottom line, displaying stagnant earnings per share.
  • FEIM's debt-to-equity ratio is very low at 0.14 and is currently below that of the industry average, implying that there has been very successful management of debt levels. Along with this, the company maintains a quick ratio of 4.07, which clearly demonstrates the ability to cover short-term cash needs.
  • FREQUENCY ELECTRONICS INC reported flat earnings per share in the most recent quarter. 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, FREQUENCY ELECTRONICS INC increased its bottom line by earning $0.47 versus $0.43 in the prior year. This year, the market expects an improvement in earnings ($0.51 versus $0.47).
  • The company, on the basis of net income growth from the same quarter one year ago, has significantly underperformed compared to the Electronic Equipment, Instruments & Components industry average, but is greater than that of the S&P 500. The net income increased by 6.4% when compared to the same quarter one year prior, going from $0.68 million to $0.72 million.
  • 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 Electronic Equipment, Instruments & Components industry and the overall market, FREQUENCY ELECTRONICS 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: Frequency Electronics Ratings Report

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At the close, Internet Initiative Japan ( IIJI) was down $0.20 (2.1%) to $9.18 on light volume. Throughout the day, 2,018 shares of Internet Initiative Japan exchanged hands as compared to its average daily volume of 3,700 shares. The stock ranged in price between $9.18-$9.24 after having opened the day at $9.24 as compared to the previous trading day's close of $9.38.

Internet Initiative Japan Inc., together with its subsidiaries, offers Internet connectivity, WAN, outsourcing, and systems integration services primarily in Japan. The company operates in two segments: Network Services and Systems Integration Business, and ATM Operation Business. Internet Initiative Japan has a market cap of $841.7 million and is part of the computer software & services industry. Shares are down 31.5% year-to-date as of the close of trading on Thursday. Currently there is 1 analyst who rates Internet Initiative Japan a buy, no analysts rate it a sell, and 1 rates it a hold.

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TheStreet Ratings rates Internet Initiative Japan as a hold. The company's strengths can be seen in multiple areas, such as its revenue growth, reasonable valuation levels and good cash flow from operations. However, as a counter to these strengths, we also find weaknesses including feeble growth in the company's earnings per share, deteriorating net income and disappointing return on equity.

Highlights from TheStreet Ratings analysis on IIJI go as follows:

  • IIJI's revenue growth trails the industry average of 27.5%. Since the same quarter one year prior, revenues slightly increased by 2.1%. 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.
  • 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 1.20 is sturdy.
  • 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. When compared to other companies in the Internet Software & Services industry and the overall market, INTERNET INITIATIVE JAPAN INC's return on equity is below that of both the industry average and the S&P 500.
  • The gross profit margin for INTERNET INITIATIVE JAPAN INC is currently lower than what is desirable, coming in at 26.53%. It has decreased from the same quarter the previous year. Along with this, the net profit margin of 1.78% significantly trails the industry average.

You can view the full analysis from the report here: Internet Initiative Japan Ratings Report

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Cover-All Technologies ( COVR) was another company that pushed the Technology sector lower today. Cover-All Technologies was down $0.11 (8.7%) to $1.15 on light volume. Throughout the day, 7,142 shares of Cover-All Technologies exchanged hands as compared to its average daily volume of 21,100 shares. The stock ranged in price between $1.15-$1.20 after having opened the day at $1.20 as compared to the previous trading day's close of $1.26.

Cover-All Technologies Inc., through its subsidiary, Cover-All Systems, Inc., licenses and maintains software products for the property/casualty insurance industry in the United States and Puerto Rico. Cover-All Technologies has a market cap of $32.5 million and is part of the computer software & services industry. Shares are down 10.0% year-to-date as of the close of trading on Thursday.

TheStreet Ratings rates Cover-All Technologies as a sell. The company's weaknesses can be seen in multiple areas, such as its weak operating cash flow and generally disappointing historical performance in the stock itself.

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Highlights from TheStreet Ratings analysis on COVR go as follows:

  • Net operating cash flow has decreased to $1.35 million or 49.22% when compared to the same quarter last year. In addition, when comparing to the industry average, the firm's growth rate is much lower.
  • COVR has underperformed the S&P 500 Index, declining 17.04% 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.
  • 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 Software industry and the overall market, COVER-ALL TECHNOLOGIES INC's return on equity significantly trails that of both the industry average and the S&P 500.
  • 47.81% is the gross profit margin for COVER-ALL TECHNOLOGIES INC which we consider to be strong. Regardless of COVR's high profit margin, it has managed to decrease from the same period last year. Despite the mixed results of the gross profit margin, COVR's net profit margin of 6.55% is significantly lower than the industry average.
  • COVER-ALL TECHNOLOGIES INC 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. During the past fiscal year, COVER-ALL TECHNOLOGIES INC continued to lose money by earning -$0.10 versus -$0.20 in the prior year.

You can view the full analysis from the report here: Cover-All Technologies Ratings Report

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