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 1.9% versus the S&P 500, which was down 1.7%. Laggards within the Computer Hardware industry included Mad Catz Interactive ( MCZ), down 3.3%, Acorn Energy ( ACFN), down 6.2%, Echelon ( ELON), down 1.7%, Qumu ( QUMU), down 5.6% and Dataram ( DRAM), down 6.3%.

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 $1.10 on average volume. Throughout the day, 80,468 shares of Echelon exchanged hands as compared to its average daily volume of 95,900 shares. The stock ranged in price between $1.10-$1.13 after having opened the day at $1.13 as compared to the previous trading day's close of $1.12.

Echelon has a market cap of $51.0 million and is part of the technology sector. Shares are down 31.8% year-to-date as of the close of trading on Monday.

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At the close, Acorn Energy ( ACFN) was down $0.04 (6.2%) to $0.61 on light volume. Throughout the day, 80,344 shares of Acorn Energy exchanged hands as compared to its average daily volume of 149,100 shares. The stock ranged in price between $0.61-$0.68 after having opened the day at $0.67 as compared to the previous trading day's close of $0.65.

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 $16.4 million and is part of the technology sector. Shares are down 19.6% year-to-date as of the close of trading on Monday. 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 80.63%, 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

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Mad Catz Interactive ( MCZ) was another company that pushed the Computer Hardware industry lower today. Mad Catz Interactive was down $0.01 (3.3%) to $0.43 on light volume. Throughout the day, 122,499 shares of Mad Catz Interactive exchanged hands as compared to its average daily volume of 191,600 shares. The stock ranged in price between $0.42-$0.44 after having opened the day at $0.44 as compared to the previous trading day's close of $0.45.

Mad Catz Interactive, Inc. designs, manufactures, markets, sells, and distributes various entertainment products in the United States and internationally. Mad Catz Interactive has a market cap of $28.2 million and is part of the technology sector. Shares are up 3.2% year-to-date as of the close of trading on Monday.

TheStreet Ratings rates Mad Catz Interactive as a sell. The company's weaknesses can be seen in multiple areas, such as its generally high debt management risk, weak operating cash flow, generally disappointing historical performance in the stock itself and poor profit margins.

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Highlights from TheStreet Ratings analysis on MCZ go as follows:

  • Currently the debt-to-equity ratio of 1.63 is quite high overall and when compared to the industry average, suggesting that the current management of debt levels should be re-evaluated. To add to this, MCZ has a quick ratio of 0.54, this demonstrates the lack of ability of the company to cover short-term liquidity needs.
  • Net operating cash flow has significantly decreased to -$0.49 million or 180.16% when compared to the same quarter last year. In addition, when comparing to the industry average, the firm's growth rate is much lower.
  • In its most recent trading session, MCZ 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. 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 gross profit margin for MAD CATZ INTERACTIVE INC is currently lower than what is desirable, coming in at 28.10%. Regardless of MCZ's low profit margin, it has managed to increase from the same period last year. Despite the mixed results of the gross profit margin, MCZ's net profit margin of 4.45% compares favorably to the industry average.
  • 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 Household Durables industry and the overall market, MAD CATZ INTERACTIVE INC's return on equity significantly trails that of both the industry average and the S&P 500.

You can view the full analysis from the report here: Mad Catz Interactive Ratings Report

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