3 Stocks Pushing The Electronics Industry Lower

 

The Electronics industry as a whole closed the day down 2.7% versus the S&P 500, which was down 1.3%. Laggards within the Electronics industry included Qualstar ( QBAK), down 1.9%, Trio-Tech International ( TRT), down 4.2%, Sevcon ( SEV), down 4.6%, Digital Power ( DPW), down 2.8% and SemiLEDs ( LEDS), down 5.9%.

 

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

 

Synopsys ( SNPS) is one of the companies that pushed the Electronics industry lower today. Synopsys was down $3.70 (7.1%) to $48.60 on heavy volume. Throughout the day, 1,538,337 shares of Synopsys exchanged hands as compared to its average daily volume of 710,600 shares. The stock ranged in price between $48.35-$52.03 after having opened the day at $51.80 as compared to the previous trading day's close of $52.30.

 

Synopsys, Inc. provides electronic design automation (EDA) software products used to design and test integrated circuits and electronic systems in the United States, Europe, Japan, and the rest of Asia Pacific. Synopsys has a market cap of $8.1 billion and is part of the technology sector. Shares are up 20.3% year-to-date as of the close of trading on Wednesday. Currently there are 6 analysts who rate Synopsys a buy, no analysts rate it a sell, and 1 rates it a hold.

 

TheStreet Ratings rates Synopsys as a buy. The company's strengths can be seen in multiple areas, such as its revenue growth, largely solid financial position with reasonable debt levels by most measures, reasonable valuation levels, solid stock price performance and good cash flow from operations. We feel its strengths outweigh the fact that the company has had somewhat disappointing return on equity.

 

Highlights from TheStreet Ratings analysis on SNPS go as follows:

 

  • The revenue growth came in higher than the industry average of 12.1%. Since the same quarter one year prior, revenues slightly increased by 7.6%. 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.
  • SNPS's debt-to-equity ratio is very low at 0.07 and is currently below that of the industry average, implying that there has been very 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.
  • Compared to its closing price of one year ago, SNPS's share price has jumped by 32.61%, exceeding the performance of the broader market during that same time frame. Regarding the stock's future course, although almost any stock can fall in a broad market decline, SNPS should continue to move higher despite the fact that it has already enjoyed a very nice gain in the past year.
  • Net operating cash flow has increased to $155.08 million or 38.70% when compared to the same quarter last year. In addition, SYNOPSYS INC has also vastly surpassed the industry average cash flow growth rate of -27.97%.
  • You can view the full analysis from the report here: Synopsys Ratings Report

These financial numbers are for the company's second quarter ended April 30, 2015. Click here for their latest quarterly financial results.

 

 

At the close, SemiLEDs ( LEDS) was down $0.03 (5.9%) to $0.43 on light volume. Throughout the day, 3,394 shares of SemiLEDs exchanged hands as compared to its average daily volume of 32,900 shares. The stock ranged in price between $0.43-$0.46 after having opened the day at $0.46 as compared to the previous trading day's close of $0.46.

 

SemiLEDs Corporation develops, manufactures, and sells light emitting diode (LED) chips and LED components. SemiLEDs has a market cap of $13.1 million and is part of the technology sector. Shares are down 58.5% year-to-date as of the close of trading on Wednesday.

TheStreet Ratings rates SemiLEDs 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 LEDS go as follows:

 

  • The gross profit margin for SEMILEDS CORP is currently extremely low, coming in at 13.43%. Despite the low profit margin, it has increased significantly from the same period last year. Despite the mixed results of the gross profit margin, LEDS's net profit margin of -86.68% significantly underperformed when compared to the industry average.
  • LEDS'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 47.62%, 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 Semiconductors & Semiconductor Equipment industry and the overall market, SEMILEDS CORP's return on equity significantly trails that of both the industry average and the S&P 500.
  • LEDS, with its decline in revenue, underperformed when compared the industry average of 10.6%. Since the same quarter one year prior, revenues fell by 24.0%. The declining revenue has not hurt the company's bottom line, with increasing earnings per share.
  • LEDS's debt-to-equity ratio is very low at 0.14 and is currently below that of the industry average, implying that there has been very successful management of debt levels. Along with the favorable debt-to-equity ratio, the company maintains an adequate quick ratio of 1.18, which illustrates the ability to avoid short-term cash problems.

 

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

 

 

 

Qualstar ( QBAK) was another company that pushed the Electronics industry lower today. Qualstar was down $0.02 (1.9%) to $1.02 on heavy volume. Throughout the day, 7,327 shares of Qualstar exchanged hands as compared to its average daily volume of 1,500 shares. The stock ranged in price between $0.95-$1.03 after having opened the day at $0.95 as compared to the previous trading day's close of $1.04.

 

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 $12.7 million and is part of the technology sector. Shares are down 21.2% year-to-date as of the close of trading on Wednesday.

 

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.

 

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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