3 Stocks Pushing The Computer Hardware Industry Lower

The Computer Hardware industry as a whole closed the day up 0.1% versus the S&P 500, which was down 0.9%. Laggards within the Computer Hardware industry included Interphase ( INPH), down 6.0%, Dataram ( DRAM), down 3.7%, Qumu ( QUMU), down 9.8%, Datalink ( DTLK), down 5.7% and Imation ( IMN), down 3.6%.

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

Datalink ( DTLK) is one of the companies that pushed the Computer Hardware industry lower today. Datalink was down $0.33 (5.7%) to $5.42 on heavy volume. Throughout the day, 307,839 shares of Datalink exchanged hands as compared to its average daily volume of 83,300 shares. The stock ranged in price between $5.36-$5.82 after having opened the day at $5.75 as compared to the previous trading day's close of $5.75.

Datalink Corporation provides data center services and solutions. Datalink has a market cap of $141.6 million and is part of the technology sector. Shares are down 55.4% year-to-date as of the close of trading on Tuesday. Currently there is 1 analyst who rates Datalink a buy, no analysts rate it a sell, and 2 rate it a hold.

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TheStreet Ratings rates Datalink as a hold. The company's strengths can be seen in multiple areas, such as its revenue growth, reasonable valuation levels and good cash flow from operations. 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 DTLK go as follows:

  • The revenue growth greatly exceeded the industry average of 21.7%. Since the same quarter one year prior, revenues rose by 14.6%. This growth in revenue does not appear to have trickled down to the company's bottom line, displayed by a decline in earnings per share.
  • DTLK's debt-to-equity ratio is very low at 0.18 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 0.83 is somewhat weak and could be cause for future problems.
  • 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 IT Services industry. The net income has significantly decreased by 81.4% when compared to the same quarter one year ago, falling from $3.56 million to $0.66 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. In comparison to the other companies in the IT Services industry and the overall market, DATALINK CORP'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: Datalink Ratings Report

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At the close, Qumu ( QUMU) was down $0.44 (9.8%) to $4.07 on light volume. Throughout the day, 21,297 shares of Qumu exchanged hands as compared to its average daily volume of 32,400 shares. The stock ranged in price between $4.07-$4.50 after having opened the day at $4.46 as compared to the previous trading day's close of $4.51.

Qumu Corporation engages in enterprise video content management software business. The company's tools enable businesses to create, manage, secure, distribute, and measure the success of their videos. Qumu has a market cap of $38.0 million and is part of the technology sector. Shares are down 67.0% year-to-date as of the close of trading on Tuesday. Currently there are 3 analysts who rate Qumu a buy, no analysts rate it a sell, and none rate it a hold.

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TheStreet Ratings rates Qumu 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 QUMU go as follows:

  • QUMU CORP's earnings per share declined by 22.9% in the most recent quarter compared to 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, QUMU CORP reported poor results of -$2.52 versus -$1.87 in the prior year. For the next year, the market is expecting a contraction of 22.4% in earnings (-$3.09 versus -$2.52).
  • 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 44.3% when compared to the same quarter one year ago, falling from -$4.82 million to -$6.95 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, QUMU CORP's return on equity significantly trails that of both the industry average and the S&P 500.
  • Net operating cash flow has decreased to -$7.76 million or 25.70% when compared to the same quarter last year. In addition, when comparing the cash generation rate to the industry average, the firm's growth is significantly lower.
  • Looking at the price performance of QUMU's shares over the past 12 months, there is not much good news to report: the stock is down 68.83%, and it has underformed the S&P 500 Index. In addition, the company's earnings per share are lower today than 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: Qumu Ratings Report

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Interphase ( INPH) was another company that pushed the Computer Hardware industry lower today. Interphase was down $0.02 (6.0%) to $0.33 on light volume. Throughout the day, 15,923 shares of Interphase exchanged hands as compared to its average daily volume of 127,800 shares. The stock ranged in price between $0.31-$0.33 after having opened the day at $0.33 as compared to the previous trading day's close of $0.35.

Interphase Corporation, an information and communications technology company, provides embedded computing solutions, engineering design services, and contract manufacturing services in North America, the Pacific Rim, and Europe. Interphase has a market cap of $2.9 million and is part of the technology sector. Shares are down 84.6% year-to-date as of the close of trading on Tuesday.

TheStreet Ratings rates Interphase 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 poor profit margins.

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Highlights from TheStreet Ratings analysis on INPH go as follows:

  • INTERPHASE CORP's earnings per share declined by 28.6% in the most recent quarter compared to the same quarter a year ago. The company has suffered a declining pattern earnings per share over the past two years. During the past fiscal year, INTERPHASE CORP reported poor results of -$0.68 versus -$0.39 in the prior year.
  • The company, on the basis of change in net income from the same quarter one year ago, has significantly underperformed against the S&P 500 and did not exceed that of the Communications Equipment industry. The net income has significantly decreased by 48.5% when compared to the same quarter one year ago, falling from -$1.02 million to -$1.51 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 Communications Equipment industry and the overall market, INTERPHASE CORP'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 -$1.30 million or 68.66% 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 INTERPHASE CORP is currently lower than what is desirable, coming in at 34.58%. Regardless of INPH's low profit margin, it has managed to increase from the same period last year. Despite the mixed results of the gross profit margin, INPH's net profit margin of -72.58% significantly underperformed when compared to the industry average.

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

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