3 Stocks Advancing The Internet 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 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 Internet industry as a whole closed the day down 0.2% versus the S&P 500, which was down 0.7%. Top gainers within the Internet industry included LookSmart ( LOOK), up 2.2%, Geeknet ( GKNT), up 3.3%, CafePress ( PRSS), up 3.0%, Tremor Video ( TRMR), up 3.2% and ModusLink Global Solutions ( MLNK), up 1.7%.

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

CafePress ( PRSS) is one of the companies that pushed the Internet industry higher today. CafePress was up $0.07 (3.0%) to $2.37 on light volume. Throughout the day, 41,101 shares of CafePress exchanged hands as compared to its average daily volume of 122,200 shares. The stock ranged in a price between $2.26-$2.39 after having opened the day at $2.27 as compared to the previous trading day's close of $2.30.

CafePress Inc. operates an e-commerce platform enabling customers to shop, create, and sell various customized and personalized products worldwide. CafePress has a market cap of $39.8 million and is part of the technology sector. Shares are down 63.7% year-to-date as of the close of trading on Tuesday. Currently there are no analysts who rate CafePress a buy, no analysts rate it a sell, and 4 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 CafePress as a sell. The company's weaknesses can be seen in multiple areas, such as its deteriorating 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.

Highlights from TheStreet Ratings analysis on PRSS 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 Internet & Catalog Retail industry. The net income has significantly decreased by 105.7% when compared to the same quarter one year ago, falling from -$3.12 million to -$6.41 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 Internet & Catalog Retail industry and the overall market, CAFEPRESS INC's return on equity significantly trails that of both the industry average and the S&P 500.
  • Net operating cash flow has significantly decreased to -$5.61 million or 2100.00% 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 59.94%, worse than the S&P 500's performance. Consistent with the plunge in the stock price, the company's earnings per share are down 105.55% 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.
  • CAFEPRESS 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. The company has reported a trend of declining earnings per share over the past two years. However, the consensus estimate suggests that this trend should reverse in the coming year. During the past fiscal year, CAFEPRESS INC reported poor results of -$0.78 versus -$0.01 in the prior year. This year, the market expects an improvement in earnings (-$0.26 versus -$0.78).

You can view the full analysis from the report here: CafePress 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, Geeknet ( GKNT) was up $0.26 (3.3%) to $8.21 on heavy volume. Throughout the day, 22,615 shares of Geeknet exchanged hands as compared to its average daily volume of 12,600 shares. The stock ranged in a price between $7.83-$8.42 after having opened the day at $7.83 as compared to the previous trading day's close of $7.95.

Geeknet, Inc., through its subsidiary, ThinkGeek, Inc., operates as an online retailer for the global geek community in the United States. Geeknet has a market cap of $55.5 million and is part of the technology sector. Shares are down 56.0% year-to-date as of the close of trading on Tuesday. Currently there is 1 analyst who rates Geeknet 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 Geeknet as a sell. The company's weaknesses can be seen in multiple areas, such as its feeble growth in its earnings per share, deteriorating net income, disappointing return on equity, weak operating cash flow and poor profit margins.

Highlights from TheStreet Ratings analysis on GKNT go as follows:

  • GEEKNET 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. Earnings per share have declined over the last year. We anticipate that this should continue in the coming year. During the past fiscal year, GEEKNET INC swung to a loss, reporting -$0.03 versus $0.26 in the prior year. For the next year, the market is expecting a contraction of 1533.3% in earnings (-$0.49 versus -$0.03).
  • 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 Internet & Catalog Retail industry. The net income has significantly decreased by 98.2% when compared to the same quarter one year ago, falling from -$1.44 million to -$2.85 million.
  • 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 Internet & Catalog Retail industry and the overall market, GEEKNET 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 -$12.77 million or 38.00% when compared to the same quarter last year. In addition, when comparing to the industry average, the firm's growth rate is much lower.
  • The gross profit margin for GEEKNET INC is rather low; currently it is at 20.92%. Regardless of GKNT's low profit margin, it has managed to increase from the same period last year. Despite the mixed results of the gross profit margin, GKNT's net profit margin of -12.79% significantly underperformed when compared to the industry average.

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

LookSmart ( LOOK) was another company that pushed the Internet industry higher today. LookSmart was up $0.02 (2.2%) to $0.68 on heavy volume. Throughout the day, 26,808 shares of LookSmart exchanged hands as compared to its average daily volume of 12,600 shares. The stock ranged in a price between $0.68-$0.70 after having opened the day at $0.69 as compared to the previous trading day's close of $0.67.

LookSmart, Ltd. provides search and display advertising network solutions in the United States, Europe, the Middle East, and Africa. LookSmart has a market cap of $4.6 million and is part of the technology sector. Shares are down 67.3% year-to-date as of the close of trading on Tuesday. Currently there are no analysts who rate LookSmart a buy, no analysts rate it a sell, and none rate it a hold.

TheStreet Ratings rates LookSmart 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 and generally disappointing historical performance in the stock itself.

Highlights from TheStreet Ratings analysis on LOOK 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 Internet Software & Services industry. The net income has significantly decreased by 36.8% when compared to the same quarter one year ago, falling from -$0.95 million to -$1.30 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 Internet Software & Services industry and the overall market, LOOKSMART LTD's return on equity significantly trails that of both the industry average and 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 61.98%, worse than the S&P 500's performance. Consistent with the plunge in the stock price, the company's earnings per share are down 27.77% 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.
  • LOOKSMART LTD's earnings per share declined by 27.8% 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, LOOKSMART LTD continued to lose money by earning -$0.93 versus -$1.92 in the prior year.
  • The revenue fell significantly faster than the industry average of 28.8%. Since the same quarter one year prior, revenues fell by 20.1%. The declining revenue appears to have seeped down to the company's bottom line, decreasing earnings per share.

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