3 Electronics Stocks Moving The Industry Upward

All three major indices traded up today with the Dow Jones Industrial Average ( ^DJI) trading up 242 points (1.4%) at 17,615 as of Monday, Aug. 10, 2015, 4:20 PM ET. The NYSE advances/declines ratio sits at 2,351 issues advancing vs. 737 declining with 111 unchanged.

The Electronics industry as a whole closed the day up 1.6% versus the S&P 500, which was up 1.3%. Top gainers within the Electronics industry included Nortech Systems ( NSYS), up 6.4%, ATRM Holdings ( ATRM), up 3.2%, Data I/O ( DAIO), up 4.1%, API Technologies ( ATNY), up 5.7% and Anadigics ( ANAD), up 10.6%.

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

API Technologies ( ATNY) is one of the companies that pushed the Electronics industry higher today. API Technologies was up $0.13 (5.7%) to $2.40 on heavy volume. Throughout the day, 28,870 shares of API Technologies exchanged hands as compared to its average daily volume of 17,100 shares. The stock ranged in a price between $2.27-$2.41 after having opened the day at $2.28 as compared to the previous trading day's close of $2.27.

API Technologies Corp., together with its subsidiaries, designs, develops, and manufactures systems, subsystems, modules, and components for radio frequency (RF) microwave, millimeterwave, electromagnetic, power, and security applications. API Technologies has a market cap of $132.5 million and is part of the industrial goods sector. Shares are up 6.6% year-to-date as of the close of trading on Friday. Currently there is 1 analyst who rates API Technologies a buy, no analysts rate it a sell, and none rate it a hold.

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TheStreet Ratings rates API Technologies as a sell. The company's weaknesses can be seen in multiple areas, such as its generally high debt management risk and poor profit margins.

Highlights from TheStreet Ratings analysis on ATNY go as follows:

  • The debt-to-equity ratio of 1.18 is relatively high when compared with the industry average, suggesting a need for better debt level management. Along with the unfavorable debt-to-equity ratio, ATNY maintains a poor quick ratio of 0.84, which illustrates the inability to avoid short-term cash problems.
  • The gross profit margin for API TECHNOLOGIES CORP is currently lower than what is desirable, coming in at 26.86%. It has decreased from the same quarter the previous year. Along with this, the net profit margin of -8.20% is significantly below that of 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 Aerospace & Defense industry and the overall market, API TECHNOLOGIES CORP's return on equity significantly trails that of both the industry average and the S&P 500.
  • ATNY, with its decline in revenue, slightly underperformed the industry average of 4.4%. Since the same quarter one year prior, revenues slightly dropped by 1.7%. The declining revenue has not hurt the company's bottom line, with increasing earnings per share.
  • Net operating cash flow has significantly increased by 85800.00% to $2.58 million when compared to the same quarter last year. In addition, API TECHNOLOGIES CORP has also vastly surpassed the industry average cash flow growth rate of 23.51%.

You can view the full analysis from the report here: API Technologies Ratings Report

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At the close, Data I/O ( DAIO) was up $0.11 (4.1%) to $2.79 on light volume. Throughout the day, 4,285 shares of Data I/O exchanged hands as compared to its average daily volume of 11,100 shares. The stock ranged in a price between $2.49-$2.80 after having opened the day at $2.49 as compared to the previous trading day's close of $2.68.

Data I/O Corporation designs, manufactures, and sells programming systems for electronic device manufacturers worldwide. The company's programming system products are used to program integrated circuits (ICs) with the specific data necessary for the ICs. Data I/O has a market cap of $21.1 million and is part of the industrial goods sector. Shares are down 20.7% year-to-date as of the close of trading on Friday. Currently there are no analysts who rate Data I/O a buy, no analysts rate it a sell, and none rate it a hold.

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TheStreet Ratings rates Data I/O 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, expanding profit margins and notable return on equity. However, as a counter to these strengths, we also find weaknesses including a generally disappointing performance in the stock itself and unimpressive growth in net income.

Highlights from TheStreet Ratings analysis on DAIO go as follows:

  • DAIO 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. Along with this, the company maintains a quick ratio of 3.14, which clearly demonstrates the ability to cover short-term cash needs.
  • The gross profit margin for DATA I/O CORP is rather high; currently it is at 57.46%. 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 2.01% trails the industry average.
  • DATA I/O 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. 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, DATA I/O CORP turned its bottom line around by earning $0.14 versus -$0.33 in the prior year.
  • The share price of DATA I/O CORP has not done very well: it is down 11.85% 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. Looking ahead, other than the push or pull of the broad market, we do not see anything in the company's numbers that may help reverse the decline experienced over the past 12 months. Despite the past decline, the stock is still selling for more than most others in its industry.
  • 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 77.6% when compared to the same quarter one year ago, falling from $0.45 million to $0.10 million.

You can view the full analysis from the report here: Data I/O Ratings Report

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ATRM Holdings ( ATRM) was another company that pushed the Electronics industry higher today. ATRM Holdings was up $0.09 (3.2%) to $2.93 on average volume. Throughout the day, 5,138 shares of ATRM Holdings exchanged hands as compared to its average daily volume of 6,300 shares. The stock ranged in a price between $2.80-$3.65 after having opened the day at $2.84 as compared to the previous trading day's close of $2.84.

ATRM Holdings, Inc., through its subsidiary, KBS Builders, Inc., manufactures, sells, and distributes modular buildings for commercial and residential applications in the New England states. ATRM Holdings has a market cap of $3.6 million and is part of the industrial goods sector. Shares are down 2.4% year-to-date as of the close of trading on Friday. Currently there are no analysts who rate ATRM Holdings a buy, no analysts rate it a sell, and none rate it a hold.

TheStreet Ratings rates ATRM Holdings 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, weak operating cash flow and generally disappointing historical performance in the stock itself.

Highlights from TheStreet Ratings analysis on ATRM go as follows:

  • ATRM HOLDINGS 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, ATRM HOLDINGS INC reported poor results of -$8.33 versus -$1.99 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 Semiconductors & Semiconductor Equipment industry. The net income has significantly decreased by 657.6% when compared to the same quarter one year ago, falling from -$0.20 million to -$1.49 million.
  • Net operating cash flow has significantly decreased to -$3.02 million or 575.74% when compared to the same quarter last year. In addition, when comparing to the industry average, the firm's growth rate is much lower.
  • Despite any intermediate fluctuations, we have only bad news to report on this stock's performance over the last year: it has tumbled by 42.86%, worse than the S&P 500's performance. Consistent with the plunge in the stock price, the company's earnings per share are down 160.41% compared to the year-earlier 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.

You can view the full analysis from the report here: ATRM Holdings Ratings Report

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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.

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