3 Electronics Stocks Driving 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 traded up today with the Dow Jones Industrial Average ( ^DJI) trading up 140 points (0.8%) at 17,869 as of Tuesday, Feb. 10, 2015, 4:20 PM ET. The NYSE advances/declines ratio sits at 1,747 issues advancing vs. 1,330 declining with 126 unchanged.

The Electronics industry as a whole closed the day up 0.8% versus the S&P 500, which was up 1.1%. Top gainers within the Electronics industry included Eltek ( ELTK), up 1.7%, SMTC ( SMTX), up 2.4%, Advanced Photonix ( API), up 2.4%, Luna Innovations ( LUNA), up 1.9% and Sigmatron International ( SGMA), up 1.9%.

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

Luna Innovations ( LUNA) is one of the companies that pushed the Electronics industry higher today. Luna Innovations was up $0.03 (1.9%) to $1.57 on light volume. Throughout the day, 8,801 shares of Luna Innovations exchanged hands as compared to its average daily volume of 44,800 shares. The stock ranged in a price between $1.54-$1.58 after having opened the day at $1.57 as compared to the previous trading day's close of $1.54.

Luna Innovations Incorporated develops, manufactures, and markets fiber optic test and measurement, sensing, and instrumentation products to measure, monitor, protect, and enhance the processes in the telecommunications, aerospace, automotive, energy, and defense industries worldwide. Luna Innovations has a market cap of $22.6 million and is part of the technology sector. Shares are up 8.4% year-to-date as of the close of trading on Monday. Currently there are no analysts who rate Luna Innovations 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 Luna Innovations as a sell. Among the areas we feel are negative, one of the most important has been unimpressive growth in net income over time.

Highlights from TheStreet Ratings analysis on LUNA 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 Professional Services industry. The net income has decreased by 21.0% when compared to the same quarter one year ago, dropping from -$0.62 million to -$0.74 million.
  • In its most recent trading session, LUNA has closed at a price level that was not very different from its closing price of one year earlier. This is probably due to its weak earnings growth as well as other mixed factors. Turning our attention to the future direction of the stock, we do not believe this stock offers ample reward opportunity to compensate for the risks, despite the fact that it rose over the past year.
  • 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 Professional Services industry and the overall market, LUNA INNOVATIONS INC's return on equity significantly trails that of both the industry average and the S&P 500.
  • LUNA INNOVATIONS 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 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, LUNA INNOVATIONS INC reported poor results of -$0.33 versus -$0.19 in the prior year.
  • 38.80% is the gross profit margin for LUNA INNOVATIONS INC which we consider to be strong. It has increased from the same quarter the previous year. Regardless of the strong results of the gross profit margin, the net profit margin of -13.85% is in-line with the industry average.

You can view the full analysis from the report here: Luna Innovations 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 up $0.01 (2.4%) to $0.42 on light volume. Throughout the day, 40,749 shares of Advanced Photonix exchanged hands as compared to its average daily volume of 115,000 shares. The stock ranged in a price between $0.40-$0.44 after having opened the day at $0.42 as compared to the previous trading day's close of $0.41.

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 $15.1 million and is part of the technology sector. Shares are up 37.3% year-to-date as of the close of trading on Monday. 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 37.69%, 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 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).
  • API's debt-to-equity ratio is very low at 0.26 and is currently below that of the industry average, implying that there has been very successful management of debt levels. Although the company had a strong debt-to-equity ratio, its quick ratio of 0.81 is somewhat weak and could be cause for future problems.

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.

SMTC ( SMTX) was another company that pushed the Electronics industry higher today. SMTC was up $0.04 (2.4%) to $1.68 on heavy volume. Throughout the day, 65,294 shares of SMTC exchanged hands as compared to its average daily volume of 23,700 shares. The stock ranged in a price between $1.60-$1.68 after having opened the day at $1.61 as compared to the previous trading day's close of $1.64.

SMTC Corporation provides advanced electronics manufacturing services worldwide. SMTC has a market cap of $27.7 million and is part of the technology sector. Shares are down 7.3% year-to-date as of the close of trading on Monday. Currently there are no analysts who rate SMTC a buy, no analysts rate it a sell, and none rate it a hold.

TheStreet Ratings rates SMTC 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, poor profit margins and generally high debt management risk.

Highlights from TheStreet Ratings analysis on SMTX go as follows:

  • SMTC CORP 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. During the past fiscal year, SMTC CORP swung to a loss, reporting -$0.73 versus $0.46 in the prior year.
  • 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 Electronic Equipment, Instruments & Components industry. The net income has significantly decreased by 195.0% when compared to the same quarter one year ago, falling from $0.62 million to -$0.59 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 Electronic Equipment, Instruments & Components industry and the overall market, SMTC CORP's return on equity significantly trails that of both the industry average and the S&P 500.
  • The gross profit margin for SMTC CORP is currently extremely low, coming in at 10.38%. Regardless of SMTX's low profit margin, it has managed to increase from the same period last year. Despite the mixed results of the gross profit margin, SMTX's net profit margin of -1.05% significantly underperformed when compared to the industry average.
  • The share price of SMTC CORP has not done very well: it is down 15.69% and has underperformed the S&P 500, in part reflecting the company's sharply declining earnings per share when compared to the year-earlier quarter. 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.

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

More from Markets

Dow Tumbles, Stocks Slide on Renewed Trade War Concerns

Dow Tumbles, Stocks Slide on Renewed Trade War Concerns

Goldman Is Bullish on Oil, Sees Demand Outweighing Inventory Concern

Goldman Is Bullish on Oil, Sees Demand Outweighing Inventory Concern

Jim Cramer: Centene Is in All the Big Medicare Markets

Jim Cramer: Centene Is in All the Big Medicare Markets

Jim Cramer on the Markets: I Struggle With How Negative Things Are

Jim Cramer on the Markets: I Struggle With How Negative Things Are

Video: Jim Cramer on Tariff Worries, Oil, Alphabet and Centene

Video: Jim Cramer on Tariff Worries, Oil, Alphabet and Centene