3 Stocks Pushing The Internet Industry 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 Internet industry as a whole closed the day up 0.9% versus the S&P 500, which was unchanged. Laggards within the Internet industry included Professional Diversity Network ( IPDN), down 4.2%, Global Sources ( GSOL), down 2.1%, Synacor ( SYNC), down 1.9%, eLong ( LONG), down 3.5% and QuinStreet ( QNST), down 3.3%.

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

Synacor ( SYNC) is one of the companies that pushed the Internet industry lower today. Synacor was down $0.04 (1.9%) to $2.11 on light volume. Throughout the day, 35,857 shares of Synacor exchanged hands as compared to its average daily volume of 153,800 shares. The stock ranged in price between $2.05-$2.20 after having opened the day at $2.11 as compared to the previous trading day's close of $2.15.

Synacor, Inc. provides startpages and homescreens, TV Everywhere solutions, Identity Management services, and various cloud-based services across a range of devices for cable, satellite, telecom, and consumer electronics companies in the United States, and the United Kingdom. Synacor has a market cap of $59.4 million and is part of the technology sector. Shares are up 7.5% year-to-date as of the close of trading on Tuesday. Currently there are no analysts who rate Synacor a buy, no analysts rate it a sell, and 1 rates it a hold.

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

Highlights from TheStreet Ratings analysis on SYNC go as follows:

  • SYNACOR 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 two years. We anticipate that this should continue in the coming year. During the past fiscal year, SYNACOR INC swung to a loss, reporting -$0.04 versus $0.14 in the prior year. For the next year, the market is expecting a contraction of 550.0% in earnings (-$0.26 versus -$0.04).
  • 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 212.0% when compared to the same quarter one year ago, falling from -$0.83 million to -$2.60 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, SYNACOR 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 -$0.52 million or 154.32% 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 share price of SYNACOR INC has not done very well: it is down 15.77% 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: Synacor Ratings Report

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At the close, Global Sources ( GSOL) was down $0.12 (2.1%) to $5.62 on average volume. Throughout the day, 16,055 shares of Global Sources exchanged hands as compared to its average daily volume of 19,500 shares. The stock ranged in price between $5.60-$5.75 after having opened the day at $5.71 as compared to the previous trading day's close of $5.74.

Global Sources Ltd. operates as a business-to-business media company primarily in Greater China. It provides sourcing information to volume buyers and integrated marketing services to suppliers. The company offers trade information using online media, print media, and face-to-face events. Global Sources has a market cap of $205.9 million and is part of the technology sector. Shares are down 9.8% year-to-date as of the close of trading on Tuesday.

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TheStreet Ratings rates Global Sources as a hold. The company's strengths can be seen in multiple areas, such as its reasonable valuation levels and largely solid financial position with reasonable debt levels by most measures. However, as a counter to these strengths, we also find weaknesses including deteriorating net income, disappointing return on equity and poor profit margins.

Highlights from TheStreet Ratings analysis on GSOL go as follows:

  • GSOL has no debt to speak of therefore resulting in a debt-to-equity ratio of zero, which we consider to be a relatively favorable sign. Although the company had a strong debt-to-equity ratio, its quick ratio of 0.83 is somewhat weak and could be cause for future problems.
  • GLOBAL SOURCES LTD 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. Stable Earnings per share over the past year indicate the company has sound management over its earnings and share float. During the past fiscal year, GLOBAL SOURCES LTD increased its bottom line by earning $0.91 versus $0.90 in the prior year.
  • 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. When compared to other companies in the Media industry and the overall market, GLOBAL SOURCES LTD's return on equity is below that of both the industry average and the S&P 500.
  • The gross profit margin for GLOBAL SOURCES LTD is rather low; currently it is at 16.10%. It has decreased from the same quarter the previous year. Along with this, the net profit margin of 4.50% significantly trails the industry average.

You can view the full analysis from the report here: Global Sources 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.

Professional Diversity Network ( IPDN) was another company that pushed the Internet industry lower today. Professional Diversity Network was down $0.20 (4.2%) to $4.45 on heavy volume. Throughout the day, 5,048 shares of Professional Diversity Network exchanged hands as compared to its average daily volume of 2,900 shares. The stock ranged in price between $4.26-$4.70 after having opened the day at $4.26 as compared to the previous trading day's close of $4.64.

Professional Diversity Network, Inc. operates online professional networking communities with career resources in the United States. Professional Diversity Network has a market cap of $58.4 million and is part of the technology sector. Shares are down 4.9% year-to-date as of the close of trading on Tuesday. Currently there is 1 analyst who rates Professional Diversity Network a buy, no analysts rate it a sell, and none rate it a hold.

TheStreet Ratings rates Professional Diversity Network 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 weak operating cash flow.

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 IPDN go as follows:

  • PROFESSIONAL DIVERSITY NETWK 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, PROFESSIONAL DIVERSITY NETWK swung to a loss, reporting -$0.23 versus $0.27 in the prior year. For the next year, the market is expecting a contraction of 65.2% in earnings (-$0.38 versus -$0.23).
  • 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 247.2% when compared to the same quarter one year ago, falling from -$0.27 million to -$0.94 million.
  • The company's current return on equity has slightly decreased from the same quarter one year prior. This implies a minor weakness in the organization. Compared to other companies in the Internet Software & Services industry and the overall market, PROFESSIONAL DIVERSITY NETWK'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 -$2.80 million or 679.10% 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 PROFESSIONAL DIVERSITY NETWK is currently very high, coming in at 75.37%. Regardless of IPDN's high profit margin, it has managed to decrease from the same period last year. Despite the mixed results of the gross profit margin, IPDN's net profit margin of -59.74% significantly underperformed when compared to the industry average.

You can view the full analysis from the report here: Professional Diversity Network 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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