3 Stocks Pushing The Technology Sector Lower

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.

The Technology sector as a whole closed the day down 0.4% versus the S&P 500, which was down 0.8%. Laggards within the Technology sector included LookSmart ( LOOK), down 4.5%, Schmitt Industries ( SMIT), down 6.4%, One Horizon Group ( OHGI), down 11.2%, Advanced Photonix ( API), down 3.2% and TigerLogic ( TIGR), down 6.4%.

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

TELUS ( TU) is one of the companies that pushed the Technology sector lower today. TELUS was down $0.61 (1.7%) to $35.01 on average volume. Throughout the day, 285,851 shares of TELUS exchanged hands as compared to its average daily volume of 274,300 shares. The stock ranged in price between $34.95-$35.69 after having opened the day at $35.61 as compared to the previous trading day's close of $35.62.

TELUS Corporation provides a range of telecommunications services and products in Canada. The company operates through two segments, Wireless and Wireline. TELUS has a market cap of $21.6 billion and is part of the telecommunications industry. Shares are down 1.2% year-to-date as of the close of trading on Thursday. Currently there are 4 analysts who rate TELUS a buy, no analysts rate it a sell, and 3 rate it a hold.

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TheStreet Ratings rates TELUS as a hold. The company's strengths can be seen in multiple areas, such as its revenue growth, expanding profit margins and increase in stock price during the past year. However, as a counter to these strengths, we also find weaknesses including unimpressive growth in net income, generally higher debt management risk and disappointing return on equity.

Highlights from TheStreet Ratings analysis on TU go as follows:

  • TU's revenue growth has slightly outpaced the industry average of 0.7%. Since the same quarter one year prior, revenues slightly increased by 5.1%. This growth in revenue appears to have trickled down to the company's bottom line, improving the earnings per share.
  • 35.53% is the gross profit margin for TELUS CORP which we consider to be strong. Regardless of TU's high profit margin, it has managed to decrease from the same period last year. Despite the mixed results of the gross profit margin, TU's net profit margin of 11.83% compares favorably to the industry average.
  • The stock price has risen over the past year, but, despite its earnings growth and some other positive factors, it has underperformed the S&P 500 so far. We feel that the combination of its price rise over the last year and its current price-to-earnings ratio relative to its industry tend to reduce its upside potential.
  • Net operating cash flow has declined marginally to $1,037.00 million or 4.33% when compared to the same quarter last year. Despite a decrease in cash flow TELUS CORP is still fairing well by exceeding its industry average cash flow growth rate of -20.49%.
  • The company, on the basis of change in net income from the same quarter one year ago, has underperformed when compared to that of the S&P 500 and the Diversified Telecommunication Services industry average. The net income has decreased by 0.3% when compared to the same quarter one year ago, dropping from $356.00 million to $355.00 million.

You can view the full analysis from the report here: TELUS 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, Advanced Photonix ( API) was down $0.01 (3.2%) to $0.30 on light volume. Throughout the day, 16,500 shares of Advanced Photonix exchanged hands as compared to its average daily volume of 63,000 shares. The stock ranged in price between $0.30-$0.31 after having opened the day at $0.31 as compared to the previous trading day's close of $0.31.

Advanced Photonix, Inc. develops, manufactures, and sells optoelectronic devices, and value-added sub-systems and systems to various original equipment manufacturers primarily in North America, Asia, Europe, and Australia. Advanced Photonix has a market cap of $11.6 million and is part of the telecommunications industry. Shares are up 5.1% year-to-date as of the close of trading on Thursday. Currently there is 1 analyst who rates Advanced Photonix 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 Advanced Photonix as a sell. Among the areas we feel are negative, one of the most important has been a generally disappointing historical performance in the stock itself.

Highlights from TheStreet Ratings analysis on API go as follows:

  • API'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 51.39%, 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.
  • The company, on the basis of net income growth from the same quarter one year ago, has significantly underperformed compared to the Electronic Equipment, Instruments & Components industry average, but is greater than that of the S&P 500. The net income increased by 36.3% when compared to the same quarter one year prior, rising from -$0.58 million to -$0.37 million.
  • 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. Compared to other companies in the Electronic Equipment, Instruments & Components industry and the overall market, ADVANCED PHOTONIX INC's return on equity significantly trails that of both the industry average and the S&P 500.
  • 35.77% is the gross profit margin for ADVANCED PHOTONIX INC which we consider to be strong. Regardless of API's high profit margin, it has managed to decrease from the same period last year. Despite the mixed results of the gross profit margin, API's net profit margin of -4.72% significantly underperformed when compared to the industry average.
  • ADVANCED PHOTONIX INC reported significant earnings per share improvement in the most recent quarter compared to the same quarter a year ago. Stable earnings per share over the past year indicate the company has sound management over its earnings and share float. However, the consensus estimates suggest that there will be an upward trend in the coming year. During the past fiscal year, ADVANCED PHOTONIX INC reported poor results of -$0.14 versus -$0.13 in the prior year. This year, the market expects an improvement in earnings (-$0.02 versus -$0.14).

You can view the full analysis from the report here: Advanced Photonix 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 Technology sector lower today. LookSmart was down $0.04 (4.5%) to $0.85 on heavy volume. Throughout the day, 29,666 shares of LookSmart exchanged hands as compared to its average daily volume of 13,600 shares. The stock ranged in price between $0.80-$0.95 after having opened the day at $0.86 as compared to the previous trading day's close of $0.89.

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 $5.7 million and is part of the telecommunications industry. Shares are up 24.5% year-to-date as of the close of trading on Thursday.

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.

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 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.

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