3 Stocks Pushing The Technology Sector Lower

The Technology sector as a whole closed the day down 0.9% versus the S&P 500, which was down 0.2%. Laggards within the Technology sector included Qualstar ( QBAK), down 2.0%, GRAVITY ( GRVY), down 1.7%, Glowpoint ( GLOW), down 5.8%, Electro-Sensors ( ELSE), down 2.7% and Digital Power ( DPW), down 3.6%.

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

Nippon Telegraph & Telephone ( NTT) is one of the companies that pushed the Technology sector lower today. Nippon Telegraph & Telephone was down $0.88 (2.2%) to $39.19 on light volume. Throughout the day, 272,124 shares of Nippon Telegraph & Telephone exchanged hands as compared to its average daily volume of 387,900 shares. The stock ranged in price between $38.97-$39.24 after having opened the day at $38.97 as compared to the previous trading day's close of $40.07.

Nippon Telegraph and Telephone Corporation, together with its subsidiaries, provides fixed and mobile voice related services, IP/packet communications services, telecommunications equipment, and system integration and other telecommunications-related services in Japan. Nippon Telegraph & Telephone has a market cap of $169.1 billion and is part of the telecommunications industry. Shares are up 56.5% year-to-date as of the close of trading on Monday. Currently there is 1 analyst who rates Nippon Telegraph & Telephone a buy, no analysts rate it a sell, and none rate it a hold.

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TheStreet Ratings rates Nippon Telegraph & Telephone as a buy. The company's strengths can be seen in multiple areas, such as its solid stock price performance, increase in net income, largely solid financial position with reasonable debt levels by most measures, attractive valuation levels and growth in earnings per share. We feel its strengths outweigh the fact that the company has had somewhat disappointing return on equity.

Highlights from TheStreet Ratings analysis on NTT go as follows:

  • The stock has not only risen over the past year, it has done so at a faster pace than the S&P 500, reflecting the earnings growth and other positive factors similar to those we have cited here. Turning our attention to the future direction of the stock, it goes without saying that even the best stocks can fall in an overall down market. However, in any other environment, this stock still has good upside potential despite the fact that it has already risen in the past year.
  • The net income growth from the same quarter one year ago has exceeded that of the S&P 500 and the Diversified Telecommunication Services industry average. The net income increased by 7.6% when compared to the same quarter one year prior, going from $1,470.82 million to $1,582.09 million.
  • The current debt-to-equity ratio, 0.55, is low and is below the industry average, implying that there has been successful management of debt levels. Along with the favorable debt-to-equity ratio, the company maintains an adequate quick ratio of 1.01, which illustrates the ability to avoid short-term cash problems.
  • NIPPON TELEGRAPH & TELEPHONE has improved earnings per share by 13.6% 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, NIPPON TELEGRAPH & TELEPHONE reported lower earnings of $1.97 versus $2.47 in the prior year. This year, the market expects an improvement in earnings ($2.35 versus $1.97).

You can view the full analysis from the report here: Nippon Telegraph & Telephone Ratings Report

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At the close, Glowpoint ( GLOW) was down $0.04 (5.8%) to $0.65 on light volume. Throughout the day, 6,201 shares of Glowpoint exchanged hands as compared to its average daily volume of 9,000 shares. The stock ranged in price between $0.65-$0.70 after having opened the day at $0.70 as compared to the previous trading day's close of $0.69.

Glowpoint has a market cap of $25.0 million and is part of the telecommunications industry. Shares are down 37.3% year-to-date as of the close of trading on Monday.

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Qualstar ( QBAK) was another company that pushed the Technology sector lower today. Qualstar was down $0.02 (2.0%) to $1.04 on average volume. Throughout the day, 1,200 shares of Qualstar exchanged hands as compared to its average daily volume of 1,500 shares. The stock ranged in price between $1.02-$1.04 after having opened the day at $1.02 as compared to the previous trading day's close of $1.06.

Qualstar Corporation designs, develops, manufactures, and sells power supplies and data storage systems worldwide. It operates through two segments, Power Supplies and Tape Libraries. Qualstar has a market cap of $13.0 million and is part of the telecommunications industry. Shares are down 19.7% year-to-date as of the close of trading on Monday.

TheStreet Ratings rates Qualstar 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.

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Highlights from TheStreet Ratings analysis on QBAK go as follows:

  • The gross profit margin for QUALSTAR CORP is currently lower than what is desirable, coming in at 34.97%. Despite the low profit margin, it has increased significantly from the same period last year. Despite the mixed results of the gross profit margin, QBAK's net profit margin of -17.36% significantly underperformed when compared to the industry average.
  • QBAK has underperformed the S&P 500 Index, declining 16.27% 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 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 Computers & Peripherals industry and the overall market, QUALSTAR CORP's return on equity significantly trails that of both the industry average and the S&P 500.
  • QUALSTAR CORP reported significant earnings per share improvement 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, QUALSTAR CORP continued to lose money by earning -$0.47 versus -$0.85 in the prior year.
  • The net income growth from the same quarter one year ago has significantly exceeded that of the S&P 500 and the Computers & Peripherals industry. The net income increased by 77.5% when compared to the same quarter one year prior, rising from -$2.17 million to -$0.49 million.

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

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