3 Stocks Pushing The Computer Software & Services 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.

One out of the three major indices traded up today The three major indices are trading lower today with the Dow Jones Industrial Average ( ^DJI) trading down 6.62 points (0.0%) at 17,862 as of Wednesday, Feb. 11, 2015, 4:20 PM ET. The NYSE advances/declines ratio sits at 1,395 issues advancing vs. 1,696 declining with 137 unchanged.

The Computer Software & Services industry as a whole closed the day down 0.2% versus the S&P 500, which was unchanged. Top gainers within the Computer Software & Services industry included TSR ( TSRI), up 5.5%, TigerLogic ( TIGR), up 8.1%, Authentidate ( ADAT), up 2.8%, Sonic Foundry ( SOFO), up 3.8% and Wave Systems ( WAVX), up 8.9%.

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

Wave Systems ( WAVX) is one of the companies that pushed the Computer Software & Services industry higher today. Wave Systems was up $0.06 (8.9%) to $0.71 on heavy volume. Throughout the day, 832,752 shares of Wave Systems exchanged hands as compared to its average daily volume of 178,600 shares. The stock ranged in a price between $0.65-$0.77 after having opened the day at $0.66 as compared to the previous trading day's close of $0.65.

Wave Systems Corp. develops, produces, and markets products for hardware-based digital security in the United States and internationally. Wave Systems has a market cap of $29.2 million and is part of the technology sector. Shares are down 18.7% year-to-date as of the close of trading on Tuesday. Currently there are no analysts who rate Wave Systems a buy, no analysts rate it a sell, and none rate it a hold.

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TheStreet Ratings rates Wave Systems as a sell. The company's weaknesses can be seen in multiple areas, such as its weak operating cash flow and generally disappointing historical performance in the stock itself.

Highlights from TheStreet Ratings analysis on WAVX go as follows:

  • Net operating cash flow has significantly decreased to -$4.16 million or 52.36% when compared to the same quarter last year. In addition, when comparing the cash generation rate to the industry average, the firm's growth is significantly lower.
  • WAVX has underperformed the S&P 500 Index, declining 15.19% 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 revenue fell significantly faster than the industry average of 8.2%. Since the same quarter one year prior, revenues fell by 30.7%. The declining revenue has not hurt the company's bottom line, with increasing earnings per share.
  • The gross profit margin for WAVE SYSTEMS CORP is currently very high, coming in at 97.25%. 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 -48.61% is in-line with the industry average.
  • WAVE SYSTEMS CORP has improved earnings per share by 44.4% in the most recent quarter compared to the same quarter a year ago. The company has demonstrated a pattern of positive earnings per share growth over the past year. During the past fiscal year, WAVE SYSTEMS CORP continued to lose money by earning -$0.72 versus -$1.40 in the prior year.

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

At the close, Sonic Foundry ( SOFO) was up $0.31 (3.8%) to $8.49 on light volume. Throughout the day, 3,353 shares of Sonic Foundry exchanged hands as compared to its average daily volume of 10,600 shares. The stock ranged in a price between $8.26-$8.49 after having opened the day at $8.26 as compared to the previous trading day's close of $8.18.

Sonic Foundry, Inc. provides enterprise solutions and services for the Web communications market in the United States, Europe, the Middle East, Asia, and internationally. Sonic Foundry has a market cap of $35.4 million and is part of the technology sector. Shares are up 7.1% year-to-date as of the close of trading on Tuesday. Currently there are no analysts who rate Sonic Foundry 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 Sonic Foundry 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 and generally disappointing historical performance in the stock itself.

Highlights from TheStreet Ratings analysis on SOFO go as follows:

  • SONIC FOUNDRY 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. During the past fiscal year, SONIC FOUNDRY INC reported poor results of -$0.67 versus -$0.21 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 Software industry. The net income has significantly decreased by 93.4% when compared to the same quarter one year ago, falling from -$0.67 million to -$1.29 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 Software industry and the overall market, SONIC FOUNDRY INC's return on equity significantly trails that of both the industry average and the S&P 500.
  • The share price of SONIC FOUNDRY INC has not done very well: it is down 9.89% 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.
  • Despite currently having a low debt-to-equity ratio of 0.43, 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 0.80 is weak.

You can view the full analysis from the report here: Sonic Foundry 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.

Authentidate ( ADAT) was another company that pushed the Computer Software & Services industry higher today. Authentidate was up $0.02 (2.8%) to $0.74 on light volume. Throughout the day, 7,243 shares of Authentidate exchanged hands as compared to its average daily volume of 60,000 shares. The stock ranged in a price between $0.74-$0.74 after having opened the day at $0.74 as compared to the previous trading day's close of $0.72.

Authentidate Holding Corp. provides Web-based software applications, and telehealth products and services in the United States. Authentidate has a market cap of $29.7 million and is part of the technology sector. Shares are down 23.4% year-to-date as of the close of trading on Tuesday. Currently there are no analysts who rate Authentidate a buy, no analysts rate it a sell, and none rate it a hold.

TheStreet Ratings rates Authentidate as a sell. The company's weaknesses can be seen in multiple areas, such as its unimpressive growth in net income, weak operating cash flow and generally disappointing historical performance in the stock itself.

Highlights from TheStreet Ratings analysis on ADAT 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 Health Care Technology industry. The net income has decreased by 12.6% when compared to the same quarter one year ago, dropping from -$1.87 million to -$2.11 million.
  • Net operating cash flow has decreased to -$1.74 million or 49.09% when compared to the same quarter last year. In addition, when comparing to the industry average, the firm's growth rate is much lower.
  • ADAT'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 37.50%, 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'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 Health Care Technology industry and the overall market, AUTHENTIDATE HOLDING CORP's return on equity significantly trails that of both the industry average and the S&P 500.
  • The revenue fell significantly faster than the industry average of 24.2%. Since the same quarter one year prior, revenues fell by 41.7%. The declining revenue has not hurt the company's bottom line, with increasing earnings per share.

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