3 Electronics Stocks Pushing Industry Growth

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 traded up today One out of the three major indices traded up today The three major indices are trading lower today with the Dow Jones Industrial Average ( ^DJI) trading down 3.30 points (0.0%) at 17,812 as of Wednesday, Nov. 26, 2014, 3:25 PM ET. The NYSE advances/declines ratio sits at 1,757 issues advancing vs. 1,268 declining with 146 unchanged.

The Electronics industry as a whole closed the day up 0.9% versus the S&P 500, which was up 0.1%. Top gainers within the Electronics industry included Aetrium ( ATRM), up 4.9%, Tel Instrument Electronics ( TIK), up 4.6%, Bel Fuse ( BELFA), up 4.8%, Qualstar ( QBAK), up 2.4% and Trio-Tech International ( TRT), up 1.6%.

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

Qualstar ( QBAK) is one of the companies that pushed the Electronics industry higher today. Qualstar was up $0.03 (2.4%) to $1.27 on average volume. Throughout the day, 23,609 shares of Qualstar exchanged hands as compared to its average daily volume of 24,800 shares. The stock ranged in a price between $1.24-$1.27 after having opened the day at $1.27 as compared to the previous trading day's close of $1.24.

Qualstar Corporation designs, develops, manufactures, and sells power supplies and data storage systems worldwide. It operates through two segments, Power Supplies and Tape Libraries. Qualstar has a market cap of $15.2 million and is part of the technology sector. Shares are up 9.7% year-to-date as of the close of trading on Tuesday. Currently there are no analysts who rate Qualstar a buy, no analysts rate it a sell, and none rate it a hold.

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TheStreet Ratings rates Qualstar as a sell. Among the areas we feel are negative, one of the most important has been poor profit margins.

Highlights from TheStreet Ratings analysis on QBAK go as follows:

  • The gross profit margin for QUALSTAR CORP is currently lower than what is desirable, coming in at 31.58%. Despite the low profit margin, it has increased significantly from the same period last year. Despite the mixed results of the gross profit margin, QBAK's net profit margin of -24.62% significantly underperformed when compared to the industry average.
  • 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 Computers & Peripherals industry and the overall market, QUALSTAR CORP's return on equity significantly trails that of both the industry average and the S&P 500.
  • QBAK, with its decline in revenue, underperformed when compared the industry average of 13.7%. Since the same quarter one year prior, revenues slightly dropped by 4.6%. The declining revenue has not hurt the company's bottom line, with increasing earnings per share.
  • QUALSTAR 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. During the past fiscal year, QUALSTAR CORP continued to lose money by earning -$0.47 versus -$0.85 in the prior year.
  • 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 80.3% when compared to the same quarter one year prior, rising from -$3.44 million to -$0.68 million.

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

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At the close, Bel Fuse ( BELFA) was up $1.13 (4.8%) to $24.43 on light volume. Throughout the day, 205 shares of Bel Fuse exchanged hands as compared to its average daily volume of 1,000 shares. The stock ranged in a price between $24.38-$24.43 after having opened the day at $24.38 as compared to the previous trading day's close of $23.30.

Bel Fuse Inc. designs, manufactures, and sells products used in the networking, telecommunication, high-speed data transmission, commercial aerospace, military, broadcasting, transportation, and consumer electronic industries worldwide. Bel Fuse has a market cap of $50.7 million and is part of the technology sector. Shares are up 19.9% year-to-date as of the close of trading on Tuesday. Currently there are no analysts who rate Bel Fuse 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 Bel Fuse as a buy. The company's strengths can be seen in multiple areas, such as its robust revenue growth, reasonable valuation levels, increase in stock price during the past year and notable return on equity. We feel these strengths outweigh the fact that the company has had sub par growth in net income.

Highlights from TheStreet Ratings analysis on BELFA go as follows:

  • BELFA's very impressive revenue growth greatly exceeded the industry average of 4.3%. Since the same quarter one year prior, revenues leaped by 54.5%. 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.
  • Compared to where it was a year ago today, the stock is now trading at a higher level, regardless of the company's weak earnings results. Looking ahead, unless broad bear market conditions prevail, we still see more upside potential for this stock, despite the fact that it has already risen over the past year.
  • BEL FUSE 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. But, we feel it is poised for EPS growth in the coming year. During the past fiscal year, BEL FUSE INC increased its bottom line by earning $1.39 versus $0.19 in the prior year. This year, the market expects an improvement in earnings ($1.93 versus $1.39).
  • 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 Communications Equipment industry and the overall market, BEL FUSE 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: Bel Fuse 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.

Aetrium ( ATRM) was another company that pushed the Electronics industry higher today. Aetrium was up $0.17 (4.9%) to $3.62 on light volume. Throughout the day, 1,840 shares of Aetrium exchanged hands as compared to its average daily volume of 3,900 shares. The stock ranged in a price between $3.54-$3.63 after having opened the day at $3.63 as compared to the previous trading day's close of $3.45.

Aetrium has a market cap of $4.2 million and is part of the technology sector. Shares are down 48.4% year-to-date as of the close of trading on Tuesday.

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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