3 Stocks Pushing The Electronics Industry Lower

The Electronics industry as a whole closed the day down 1.5% versus the S&P 500, which was down 1.7%. Laggards within the Electronics industry included Sevcon ( SEV), down 7.3%, Digital Power ( DPW), down 4.4%, Dynasil Corp of America ( DYSL), down 6.8%, Bel Fuse ( BELFA), down 4.6% and SMTC ( SMTX), down 3.2%.

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

SMTC ( SMTX) is one of the companies that pushed the Electronics industry lower today. SMTC was down $0.05 (3.2%) to $1.50 on light volume. Throughout the day, 4,965 shares of SMTC exchanged hands as compared to its average daily volume of 15,400 shares. The stock ranged in price between $1.47-$1.55 after having opened the day at $1.47 as compared to the previous trading day's close of $1.55.

SMTC Corporation provides advanced electronics manufacturing services worldwide. SMTC has a market cap of $26.1 million and is part of the industrial goods sector. Shares are down 12.4% year-to-date as of the close of trading on Thursday.

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

Highlights from TheStreet Ratings analysis on SMTX go as follows:

  • The gross profit margin for SMTC CORP is currently extremely low, coming in at 11.08%. It has decreased from the same quarter the previous year. Along with this, the net profit margin of 1.67% trails that of the industry average.
  • SMTX has underperformed the S&P 500 Index, declining 14.84% 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.
  • SMTX's debt-to-equity ratio of 0.88 is somewhat low overall, but it is high when compared to the industry average, implying that the management of the debt levels should be evaluated further. Despite the fact that SMTX's debt-to-equity ratio is mixed in its results, the company's quick ratio of 0.58 is low and demonstrates weak liquidity.
  • 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, SMTC CORP's return on equity significantly trails that of both the industry average and the S&P 500.
  • Regardless of the drop in revenue, the company managed to outperform against the industry average of 5.6%. Since the same quarter one year prior, revenues slightly dropped by 0.4%. The declining revenue has not hurt the company's bottom line, with increasing earnings per share.

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

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At the close, Bel Fuse ( BELFA) was down $0.75 (4.6%) to $15.40 on heavy volume. Throughout the day, 2,631 shares of Bel Fuse exchanged hands as compared to its average daily volume of 1,400 shares. The stock ranged in price between $15.40-$15.95 after having opened the day at $15.90 as compared to the previous trading day's close of $16.15.

Bel Fuse Inc. designs, manufactures, and sells products used in the networking, telecommunication, high-speed data transmission, commercial aerospace, military, broadcasting, transportation, and consumer electronic industries worldwide. Bel Fuse has a market cap of $37.6 million and is part of the industrial goods sector. Shares are down 32.7% year-to-date as of the close of trading on Thursday.

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

Highlights from TheStreet Ratings analysis on BELFA go as follows:

  • The revenue growth greatly exceeded the industry average of 9.6%. Since the same quarter one year prior, revenues rose by 46.5%. Growth in the company's revenue appears to have helped boost the earnings per share.
  • The net income growth from the same quarter one year ago has significantly exceeded that of the S&P 500 and the Communications Equipment industry. The net income increased by 97.8% when compared to the same quarter one year prior, rising from $3.07 million to $6.06 million.
  • BEL FUSE 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, BEL FUSE INC reported lower earnings of $0.79 versus $1.39 in the prior year. This year, the market expects an improvement in earnings ($2.36 versus $0.79).
  • BELFA's debt-to-equity ratio of 0.90 is somewhat low overall, but it is high when compared to the industry average, implying that the management of the debt levels should be evaluated further. Regardless of the somewhat mixed results with the debt-to-equity ratio, the company's quick ratio of 1.32 is sturdy.

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

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Dynasil Corp of America ( DYSL) was another company that pushed the Electronics industry lower today. Dynasil Corp of America was down $0.11 (6.8%) to $1.50 on heavy volume. Throughout the day, 281,398 shares of Dynasil Corp of America exchanged hands as compared to its average daily volume of 13,000 shares. The stock ranged in price between $1.40-$1.66 after having opened the day at $1.64 as compared to the previous trading day's close of $1.61.

Dynasil Corporation of America develops, manufactures, and markets detection, sensing, and analysis technology products for medical, industrial, and homeland security/defense sectors in the United States and internationally. Dynasil Corp of America has a market cap of $24.1 million and is part of the industrial goods sector. Shares are up 11.8% year-to-date as of the close of trading on Thursday.

TheStreet Ratings rates Dynasil Corp of America as a sell. The company's weaknesses can be seen in multiple areas, such as its deteriorating net income, disappointing return on equity, weak operating cash flow and generally disappointing historical performance in the stock itself.

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Highlights from TheStreet Ratings analysis on DYSL go as follows:

  • 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 136.5% when compared to the same quarter one year ago, falling from $0.27 million to -$0.10 million.
  • Current return on equity is lower than its ROE from the same quarter one year prior. This is a clear sign of weakness within the company. Compared to other companies in the Electronic Equipment, Instruments & Components industry and the overall market, DYNASIL CORP OF AMERICA's return on equity significantly trails that of both the industry average and the S&P 500.
  • Net operating cash flow has decreased to $1.01 million or 30.04% 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.
  • The share price of DYNASIL CORP OF AMERICA has not done very well: it is down 17.05% 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. Turning toward the future, the fact that the stock has come down in price over the past year should not necessarily be interpreted as a negative; it could be one of the factors that may help make the stock attractive down the road. Right now, however, we believe that it is too soon to buy.
  • DYNASIL CORP OF AMERICA 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, DYNASIL CORP OF AMERICA turned its bottom line around by earning $0.13 versus -$0.59 in the prior year.

You can view the full analysis from the report here: Dynasil Corp of America Ratings Report

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