3 Stocks Pushing The Technology Sector Lower

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The Technology sector as a whole closed the day up 0.7% versus the S&P 500, which was up 0.1%. Laggards within the Technology sector included TSR ( TSRI), down 1.7%, LGL Group ( LGL), down 2.6%, Intelligent Systems ( INS), down 1.9%, Bridgeline Digital ( BLIN), down 2.5% and Nortech Systems ( NSYS), down 2.0%.

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

Oi ( OIBR) is one of the companies that pushed the Technology sector lower today. Oi was down $0.02 (4.1%) to $0.56 on light volume. Throughout the day, 2,804,557 shares of Oi exchanged hands as compared to its average daily volume of 11,413,300 shares. The stock ranged in price between $0.55-$0.58 after having opened the day at $0.57 as compared to the previous trading day's close of $0.58.

Oi S.A., through its subsidiaries, provides integrated telecommunication services for residential customers, companies, and governmental agencies in Brazil. It operates in three segments: Fixed-Line and Data Transmission Services, Mobile Services, and Other Services. Oi has a market cap of $4.7 billion and is part of the telecommunications industry. Shares are down 63.5% year-to-date as of the close of trading on Tuesday. Currently there is 1 analyst who rates Oi a buy, 1 analyst rates it a sell, and 3 rate it a hold.

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TheStreet Ratings rates Oi as a sell. The company's weaknesses can be seen in multiple areas, such as its feeble growth in its earnings per share, unimpressive growth in net income, generally high debt management risk, disappointing return on equity and generally disappointing historical performance in the stock itself.

Highlights from TheStreet Ratings analysis on OIBR go as follows:

  • OI SA's earnings per share declined by 50.0% in the most recent quarter compared to the same quarter a year ago. Earnings per share have declined over the last two years. We anticipate that this should continue in the coming year. During the past fiscal year, OI SA reported lower earnings of $0.39 versus $0.79 in the prior year. For the next year, the market is expecting a contraction of 97.4% in earnings ($0.01 versus $0.39).
  • 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 Diversified Telecommunication Services industry. The net income has significantly decreased by 45.5% when compared to the same quarter one year ago, falling from -$67.24 million to -$97.86 million.
  • Although OIBR's debt-to-equity ratio of 2.15 is very high, it is currently less than that of the industry average. Along with the unfavorable debt-to-equity ratio, OIBR maintains a poor quick ratio of 0.76, which illustrates the inability to avoid short-term cash problems.
  • 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. In comparison to the other companies in the Diversified Telecommunication Services industry and the overall market, OI SA's return on equity is significantly below that of the industry average and is below that of the S&P 500.
  • Despite any intermediate fluctuations, we have only bad news to report on this stock's performance over the last year: it has tumbled by 63.16%, worse than the S&P 500's performance. Consistent with the plunge in the stock price, the company's earnings per share are down 50.00% 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.

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

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At the close, Bridgeline Digital ( BLIN) was down $0.02 (2.5%) to $0.74 on light volume. Throughout the day, 7,037 shares of Bridgeline Digital exchanged hands as compared to its average daily volume of 35,900 shares. The stock ranged in price between $0.71-$0.74 after having opened the day at $0.71 as compared to the previous trading day's close of $0.76.

Bridgeline Digital, Inc. develops iAPPS Web engagement management product platform and related digital solutions in the United States. Its iAPPS platform enables companies and developers to create Websites, Web applications, and online stores. Bridgeline Digital has a market cap of $16.2 million and is part of the telecommunications industry. Shares are down 30.2% year-to-date as of the close of trading on Tuesday. Currently there is 1 analyst who rates Bridgeline Digital a buy, no analysts rate it a sell, and none rate it a hold.

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TheStreet Ratings rates Bridgeline Digital as a sell. The company's weaknesses can be seen in multiple areas, such as its disappointing return on equity, generally disappointing historical performance in the stock itself and feeble growth in its earnings per share.

Highlights from TheStreet Ratings analysis on BLIN go as follows:

  • 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 Internet Software & Services industry and the overall market, BRIDGELINE DIGITAL INC's return on equity significantly trails that of both the industry average and the S&P 500.
  • BLIN has underperformed the S&P 500 Index, declining 25.00% 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.
  • BRIDGELINE DIGITAL INC has improved earnings per share by 40.0% in the most recent quarter compared to 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, BRIDGELINE DIGITAL INC reported poor results of -$0.23 versus -$0.07 in the prior year. For the next year, the market is expecting a contraction of 26.1% in earnings (-$0.29 versus -$0.23).
  • 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 0.95 is weak.
  • Net operating cash flow has increased to -$1.22 million or 14.87% when compared to the same quarter last year. Despite an increase in cash flow, BRIDGELINE DIGITAL INC's cash flow growth rate is still lower than the industry average growth rate of 25.79%.

You can view the full analysis from the report here: Bridgeline Digital 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.

LGL Group ( LGL) was another company that pushed the Technology sector lower today. LGL Group was down $0.10 (2.6%) to $3.50 on light volume. Throughout the day, 108 shares of LGL Group exchanged hands as compared to its average daily volume of 3,600 shares. The stock ranged in price between $3.50-$3.50 after having opened the day at $3.50 as compared to the previous trading day's close of $3.60.

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 $8.9 million and is part of the telecommunications industry. Shares are down 33.5% year-to-date as of the close of trading on Tuesday.

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.

STOCKS TO BUY: TheStreet Quant Ratings has identified a handful of stocks that can potentially TRIPLE in the next 12 months. Learn more.

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 33.60%, 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.

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