3 Stocks Pushing The Computer Hardware 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.

The Computer Hardware industry as a whole closed the day down 1.5% versus the S&P 500, which was down 1.3%. Laggards within the Computer Hardware industry included Transact Technologies ( TACT), down 2.7%, Acorn Energy ( ACFN), down 11.0%, Echelon ( ELON), down 1.7%, Dataram ( DRAM), down 4.4% and Crossroads Systems ( CRDS), down 7.9%.

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

Echelon ( ELON) is one of the companies that pushed the Computer Hardware industry lower today. Echelon was down $0.02 (1.7%) to $1.15 on light volume. Throughout the day, 57,259 shares of Echelon exchanged hands as compared to its average daily volume of 97,800 shares. The stock ranged in price between $1.11-$1.18 after having opened the day at $1.18 as compared to the previous trading day's close of $1.17.

Echelon has a market cap of $51.9 million and is part of the technology sector. Shares are down 31.2% year-to-date as of the close of trading on Thursday.

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At the close, Acorn Energy ( ACFN) was down $0.08 (11.0%) to $0.60 on light volume. Throughout the day, 38,610 shares of Acorn Energy exchanged hands as compared to its average daily volume of 152,100 shares. The stock ranged in price between $0.60-$0.71 after having opened the day at $0.65 as compared to the previous trading day's close of $0.68.

Acorn Energy, Inc., through its subsidiaries, provides technology driven solutions for energy infrastructure asset management worldwide. It offers oil and gas sensor systems, a fiber optic sensing system for the energy, commercial security, and defense markets. Acorn Energy has a market cap of $18.8 million and is part of the technology sector. Shares are down 11.8% year-to-date as of the close of trading on Thursday. Currently there is 1 analyst who rates Acorn Energy a buy, no analysts rate it a sell, and 1 rates it a hold.

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TheStreet Ratings rates Acorn Energy as a sell. The company's weaknesses can be seen in multiple areas, such as its poor profit margins and generally disappointing historical performance in the stock itself.

Highlights from TheStreet Ratings analysis on ACFN go as follows:

  • The gross profit margin for ACORN ENERGY INC is currently lower than what is desirable, coming in at 32.75%. Regardless of ACFN's low profit margin, it has managed to increase from the same period last year. Despite the mixed results of the gross profit margin, ACFN's net profit margin of -68.25% significantly underperformed when compared to the industry average.
  • ACFN'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 81.31%, 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 Electronic Equipment, Instruments & Components industry and the overall market, ACORN ENERGY INC's return on equity significantly trails that of both the industry average and the S&P 500.
  • ACFN'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 1.00 is somewhat weak and could be cause for future problems.
  • ACORN ENERGY INC reported significant earnings per share improvement in the most recent quarter compared to the same quarter a year ago. This company has reported somewhat volatile earnings recently. But, we feel it is poised for EPS growth in the coming year. During the past fiscal year, ACORN ENERGY INC reported poor results of -$1.60 versus -$0.94 in the prior year. This year, the market expects an improvement in earnings (-$0.71 versus -$1.60).

You can view the full analysis from the report here: Acorn Energy 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.

Transact Technologies ( TACT) was another company that pushed the Computer Hardware industry lower today. Transact Technologies was down $0.17 (2.7%) to $6.20 on heavy volume. Throughout the day, 66,412 shares of Transact Technologies exchanged hands as compared to its average daily volume of 16,000 shares. The stock ranged in price between $6.10-$6.70 after having opened the day at $6.10 as compared to the previous trading day's close of $6.37.

TransAct Technologies Incorporated designs, develops, manufactures, and sells transaction-based and specialty printers. Transact Technologies has a market cap of $52.9 million and is part of the technology sector. Shares are up 16.4% year-to-date as of the close of trading on Thursday. Currently there is 1 analyst who rates Transact Technologies a buy, no analysts rate it a sell, and none rate it a hold.

TheStreet Ratings rates Transact Technologies as a hold. The company's strengths can be seen in multiple areas, such as its largely solid financial position with reasonable debt levels by most measures, good cash flow from operations and expanding profit margins. However, as a counter to these strengths, we also find weaknesses including a generally disappointing performance in the stock itself, deteriorating net income and disappointing return on equity.

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Highlights from TheStreet Ratings analysis on TACT go as follows:

  • TACT 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. To add to this, TACT has a quick ratio of 1.99, which demonstrates the ability of the company to cover short-term liquidity needs.
  • Net operating cash flow has significantly increased by 69.10% to -$0.39 million when compared to the same quarter last year. The firm also exceeded the industry average cash flow growth rate of 50.63%.
  • 42.15% is the gross profit margin for TRANSACT TECHNOLOGIES INC which we consider to be strong. Regardless of TACT's high profit margin, it has managed to decrease from the same period last year. Despite the mixed results of the gross profit margin, TACT's net profit margin of 0.37% is significantly lower than the industry average.
  • Despite any intermediate fluctuations, we have only bad news to report on this stock's performance over the last year: it has tumbled by 42.18%, worse than the S&P 500's performance. Consistent with the plunge in the stock price, the company's earnings per share are down 94.11% compared to the year-earlier quarter. Although its share price is down sharply from a year ago, do not assume that it can now be tagged as cheap and attractive. The reality is that, based on its current price in relation to its earnings, TACT is still more expensive than most of the other companies in its industry.
  • 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. In comparison to the other companies in the Computers & Peripherals industry and the overall market, TRANSACT TECHNOLOGIES INC's return on equity is significantly below that of the industry average and is below that of the S&P 500.

You can view the full analysis from the report here: Transact Technologies 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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