3 Computer Hardware Stocks Pushing The Industry Higher

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 are trading down today with the Dow Jones Industrial Average ( ^DJI) trading down 49.00 points (-0.3%) at 17,934 as of Wednesday, Dec. 31, 2014, 3:25 PM ET. The NYSE advances/declines ratio sits at 1,635 issues advancing vs. 1,400 declining with 160 unchanged.

The Computer Hardware industry as a whole was unchanged today versus the S&P 500, which was down 0.7%. Top gainers within the Computer Hardware industry included Mad Catz Interactive ( MCZ), up 3.1%, Crossroads Systems ( CRDS), up 2.0%, Echelon ( ELON), up 1.8%, Acorn Energy ( ACFN), up 4.9% and Xplore Technologies ( XPLR), up 2.0%.

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

Echelon ( ELON) is one of the companies that pushed the Computer Hardware industry higher today. Echelon was up $0.03 (1.8%) to $1.70 on heavy volume. Throughout the day, 159,505 shares of Echelon exchanged hands as compared to its average daily volume of 79,900 shares. The stock ranged in a price between $1.67-$1.71 after having opened the day at $1.67 as compared to the previous trading day's close of $1.67.

Echelon has a market cap of $74.7 million and is part of the technology sector. Shares are down 22.3% year-to-date as of the close of trading on Tuesday.

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At the close, Crossroads Systems ( CRDS) was up $0.05 (2.0%) to $2.55 on heavy volume. Throughout the day, 71,662 shares of Crossroads Systems exchanged hands as compared to its average daily volume of 42,100 shares. The stock ranged in a price between $2.49-$2.66 after having opened the day at $2.57 as compared to the previous trading day's close of $2.50.

Crossroads Systems, Inc. provides data protection solutions and services worldwide. Crossroads Systems has a market cap of $37.3 million and is part of the technology sector. Shares are up 3.7% year-to-date as of the close of trading on Tuesday. Currently there are no analysts who rate Crossroads Systems a buy, no analysts rate it a sell, and none rate it a hold.

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TheStreet Ratings rates Crossroads Systems as a sell. The area that we feel has been the company's primary weakness has been its unimpressive growth in net income.

Highlights from TheStreet Ratings analysis on CRDS go as follows:

  • The company, on the basis of net income growth from the same quarter one year ago, has underperformed when compared to that of the S&P 500 and the Computers & Peripherals industry average. The net income increased by 4.7% when compared to the same quarter one year prior, going from -$2.05 million to -$1.96 million.
  • The revenue fell significantly faster than the industry average of 13.5%. Since the same quarter one year prior, revenues fell by 25.6%. The declining revenue has not hurt the company's bottom line, with increasing earnings per share.
  • The gross profit margin for CROSSROADS SYSTEMS INC is currently very high, coming in at 83.39%. Regardless of CRDS's high profit margin, it has managed to decrease from the same period last year. Despite the mixed results of the gross profit margin, CRDS's net profit margin of -73.96% significantly underperformed when compared to the industry average.
  • Net operating cash flow has increased to -$1.21 million or 42.42% when compared to the same quarter last year. In addition, CROSSROADS SYSTEMS INC has also modestly surpassed the industry average cash flow growth rate of 35.13%.
  • This stock has increased by 26.39% over the past year, outperforming the rise in the S&P 500 Index during the same period. Regarding the future course of this stock, we feel that the risks involved in investing in CRDS do not compensate for any future upside potential, despite the fact that it has seen nice gains over the past 12 months.

You can view the full analysis from the report here: Crossroads 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.

Mad Catz Interactive ( MCZ) was another company that pushed the Computer Hardware industry higher today. Mad Catz Interactive was up $0.01 (3.1%) to $0.42 on average volume. Throughout the day, 209,918 shares of Mad Catz Interactive exchanged hands as compared to its average daily volume of 164,800 shares. The stock ranged in a price between $0.41-$0.42 after having opened the day at $0.42 as compared to the previous trading day's close of $0.41.

Mad Catz Interactive, Inc. designs, manufactures, markets, sells, and distributes various entertainment products in the United States and internationally. Mad Catz Interactive has a market cap of $27.7 million and is part of the technology sector. Shares are down 20.6% year-to-date as of the close of trading on Tuesday. Currently there are no analysts who rate Mad Catz Interactive a buy, no analysts rate it a sell, and none rate it a hold.

TheStreet Ratings rates Mad Catz Interactive as a sell. The company's weaknesses can be seen in multiple areas, such as its generally high debt management risk, generally disappointing historical performance in the stock itself, weak operating cash flow and poor profit margins.

Highlights from TheStreet Ratings analysis on MCZ go as follows:

  • The debt-to-equity ratio of 1.29 is relatively high when compared with the industry average, suggesting a need for better debt level management. Along with this, the company manages to maintain a quick ratio of 0.45, which clearly demonstrates the inability to cover short-term cash needs.
  • Net operating cash flow has decreased to -$3.16 million or 16.77% when compared to the same quarter last year. Despite a decrease in cash flow of 16.77%, MAD CATZ INTERACTIVE INC is still significantly exceeding the industry average of -67.82%.
  • MCZ has underperformed the S&P 500 Index, declining 12.00% 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.
  • The gross profit margin for MAD CATZ INTERACTIVE INC is currently lower than what is desirable, coming in at 31.96%. Regardless of MCZ's low profit margin, it has managed to increase from the same period last year. Despite the mixed results of the gross profit margin, the net profit margin of -4.10% trails the industry average.
  • 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 Household Durables industry and the overall market, MAD CATZ INTERACTIVE INC'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: Mad Catz Interactive 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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