3 Stocks Improving Performance Of The Computer Software & Services Industry

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.

All three major indices traded up today with the Dow Jones Industrial Average ( ^DJI) trading up 78 points (0.4%) at 17,726 as of Tuesday, Nov. 18, 2014, 3:25 PM ET. The NYSE advances/declines ratio sits at 2,060 issues advancing vs. 970 declining with 148 unchanged.

The Computer Software & Services industry as a whole closed the day up 0.4% versus the S&P 500, which was up 0.7%. Top gainers within the Computer Software & Services industry included TigerLogic ( TIGR), up 27.6%, TSR ( TSRI), up 3.6%, Asure Software ( ASUR), up 2.6%, QAD ( QADB), up 2.7% and Peerless Systems ( PRLS), up 5.4%.

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

Peerless Systems ( PRLS) is one of the companies that pushed the Computer Software & Services industry higher today. Peerless Systems was up $0.25 (5.4%) to $4.91 on light volume. Throughout the day, 705 shares of Peerless Systems exchanged hands as compared to its average daily volume of 9,000 shares. The stock ranged in a price between $4.70-$4.91 after having opened the day at $4.70 as compared to the previous trading day's close of $4.66.

Peerless Systems Corporation develops and licenses software-based digital imaging and networking systems and supporting electronic technologies to original equipment manufacturers (OEMs) of digital document products located primarily in the United States and Japan. Peerless Systems has a market cap of $12.7 million and is part of the technology sector. Shares are up 28.1% year-to-date as of the close of trading on Monday. Currently there are no analysts who rate Peerless Systems 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 Peerless Systems as a hold. The company's strengths can be seen in multiple areas, such as its solid stock price performance, increase in net income and largely solid financial position with reasonable debt levels by most measures. However, as a counter to these strengths, we also find weaknesses including disappointing return on equity and weak operating cash flow.

Highlights from TheStreet Ratings analysis on PRLS go as follows:

  • Powered by its strong earnings growth of 135.71% and other important driving factors, this stock has surged by 28.72% over the past year, outperforming the rise in the S&P 500 Index during the same period. Regarding the stock's future course, our hold rating indicates that we do not recommend additional investment in this stock despite its gains in the past year.
  • The net income growth from the same quarter one year ago has significantly exceeded that of the S&P 500 and the Software industry. The net income increased by 134.1% when compared to the same quarter one year prior, rising from -$0.40 million to $0.14 million.
  • The revenue fell significantly faster than the industry average of 28.1%. Since the same quarter one year prior, revenues fell by 32.8%. The declining revenue has not hurt the company's bottom line, with increasing earnings per share.
  • Net operating cash flow has significantly decreased to -$0.41 million or 140.85% when compared to the same quarter last year. In addition, when comparing to the industry average, the firm's growth rate is much lower.
  • 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 Software industry and the overall market, PEERLESS SYSTEMS CORP's return on equity significantly trails that of both the industry average and the S&P 500.

You can view the full analysis from the report here: Peerless Systems 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.

At the close, QAD ( QADB) was up $0.47 (2.7%) to $18.00 on light volume. Throughout the day, 221 shares of QAD exchanged hands as compared to its average daily volume of 2,100 shares. The stock ranged in a price between $18.00-$18.00 after having opened the day at $18.00 as compared to the previous trading day's close of $17.53.

QAD has a market cap of $58.8 million and is part of the technology sector. Shares are up 15.2% 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.

Asure Software ( ASUR) was another company that pushed the Computer Software & Services industry higher today. Asure Software was up $0.13 (2.6%) to $5.14 on light volume. Throughout the day, 3,117 shares of Asure Software exchanged hands as compared to its average daily volume of 6,800 shares. The stock ranged in a price between $5.10-$5.21 after having opened the day at $5.10 as compared to the previous trading day's close of $5.01.

Asure Software, Inc. provides cloud-based software-as-a-service (SaaS) time and labor management, and workspace management solutions worldwide. Asure Software has a market cap of $30.6 million and is part of the technology sector. Shares are down 10.0% year-to-date as of the close of trading on Monday. Currently there is 1 analyst who rates Asure Software a buy, no analysts rate it a sell, and none rate it a hold.

TheStreet Ratings rates Asure Software as a hold. The company's strengths can be seen in multiple areas, such as its compelling growth in net income, revenue growth and expanding profit margins. However, as a counter to these strengths, we also find weaknesses including generally higher debt management risk, weak operating cash flow and a generally disappointing performance in the stock itself.

Highlights from TheStreet Ratings analysis on ASUR go as follows:

  • ASURE SOFTWARE 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. We feel that this trend should continue. This trend suggests that the performance of the business is improving. During the past fiscal year, ASURE SOFTWARE INC continued to lose money by earning -$0.31 versus -$0.59 in the prior year. This year, the market expects an improvement in earnings ($0.14 versus -$0.31).
  • The net income growth from the same quarter one year ago has significantly exceeded that of the S&P 500 and the Software industry. The net income increased by 102.6% when compared to the same quarter one year prior, rising from -$0.57 million to $0.02 million.
  • The gross profit margin for ASURE SOFTWARE INC is currently very high, coming in at 81.84%. It has increased from the same quarter the previous year. Despite the strong results of the gross profit margin, ASUR's net profit margin of 0.22% significantly trails the industry average.
  • Net operating cash flow has declined marginally to $0.68 million or 6.11% when compared to the same quarter last year. In addition, when comparing the cash generation rate to the industry average, the firm's growth is significantly lower.
  • The debt-to-equity ratio is very high at 3.98 and currently higher than the industry average, implying increased risk associated with the management of debt levels within the company. Along with this, the company manages to maintain a quick ratio of 0.43, which clearly demonstrates the inability to cover short-term cash needs.

You can view the full analysis from the report here: Asure Software 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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