3 Stocks Pushing The Technology Sector 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 Technology sector as a whole closed the day down 1.0% versus the S&P 500, which was up 0.1%. Laggards within the Technology sector included Tel Instrument Electronics ( TIK), down 7.5%, CollabRx ( CLRX), down 1.6%, LGL Group ( LGL), down 2.4%, GRAVITY ( GRVY), down 9.8% and Sajan ( SAJA), down 2.6%.

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

Sajan ( SAJA) is one of the companies that pushed the Technology sector lower today. Sajan was down $0.16 (2.6%) to $6.05 on light volume. Throughout the day, 750 shares of Sajan exchanged hands as compared to its average daily volume of 3,500 shares. The stock ranged in price between $6.05-$6.06 after having opened the day at $6.06 as compared to the previous trading day's close of $6.21.

Sajan has a market cap of $29.6 million and is part of the telecommunications industry. Shares are up 7.1% year-to-date as of the close of trading on Friday. Currently there is 1 analyst who rates Sajan a buy, no analysts rate it a sell, and none rate it a hold.

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At the close, LGL Group ( LGL) was down $0.09 (2.4%) to $3.66 on heavy volume. Throughout the day, 6,850 shares of LGL Group exchanged hands as compared to its average daily volume of 3,100 shares. The stock ranged in price between $3.65-$3.82 after having opened the day at $3.66 as compared to the previous trading day's close of $3.75.

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 $10.1 million and is part of the telecommunications industry. Shares are down 31.4% year-to-date as of the close of trading on Friday.

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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.

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 36.37%, 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.

CollabRx ( CLRX) was another company that pushed the Technology sector lower today. CollabRx was down $0.01 (1.6%) to $0.80 on heavy volume. Throughout the day, 29,803 shares of CollabRx exchanged hands as compared to its average daily volume of 14,300 shares. The stock ranged in price between $0.80-$0.87 after having opened the day at $0.81 as compared to the previous trading day's close of $0.81.

CollabRx, Inc. provides cloud-based expert systems to inform healthcare decision-making. The company's cloud-based expert systems provide clinical knowledge to institutions, physicians, researchers, and patients for genomics-based medicine in cancer. CollabRx has a market cap of $2.2 million and is part of the telecommunications industry. Shares are down 78.6% year-to-date as of the close of trading on Friday. Currently there is 1 analyst who rates CollabRx a buy, no analysts rate it a sell, and none rate it a hold.

TheStreet Ratings rates CollabRx 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, generally disappointing historical performance in the stock itself and feeble growth in its earnings per share.

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Highlights from TheStreet Ratings analysis on CLRX 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 Health Care Technology industry. The net income has significantly decreased by 56.6% when compared to the same quarter one year ago, falling from -$0.80 million to -$1.25 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 Health Care Technology industry and the overall market, COLLABRX INC's return on equity significantly trails that of both the industry average and the S&P 500.
  • Net operating cash flow has decreased to -$0.73 million or 19.96% 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 81.25%, worse than the S&P 500's performance. Consistent with the plunge in the stock price, the company's earnings per share are down 74.28% 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.
  • COLLABRX 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. We feel it is likely to report a decline in earnings in the coming year. During the past fiscal year, COLLABRX INC continued to lose money by earning -$1.78 versus -$2.15 in the prior year. For the next year, the market is expecting a contraction of 3.9% in earnings (-$1.85 versus -$1.78).

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