3 Stocks Pushing The Telecommunications Industry Lower
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 or Stephanie Link.The Telecommunications industry as a whole closed the day down 0.4% versus the S&P 500, which was down 0.3%. Laggards within the Telecommunications industry included Optical Cable (OCC), down 2.9%, Glowpoint (GLOW), down 3.9%, RIT Technologies (RITT), down 3.9%, RRSat Global Communications Network (RRST), down 2.4% and Communications Systems (JCS), down 2.0%.TheStreet Ratings Group would like to highlight 3 stocks that pushed the industry lower today:RRSat Global Communications Network (RRST) is one of the companies that pushed the Telecommunications industry lower today. RRSat Global Communications Network was down $0.21 (2.4%) to $8.72 on light volume. Throughout the day, 2,689 shares of RRSat Global Communications Network exchanged hands as compared to its average daily volume of 11,500 shares. The stock ranged in price between $8.72-$8.95 after having opened the day at $8.92 as compared to the previous trading day's close of $8.93. RRsat Global Communications Network Ltd. provides digital media management and distribution services for broadcasters and content owners in North America, Europe, Asia, Israel, the Middle East, and internationally. RRSat Global Communications Network has a market cap of $155.6 million and is part of the technology sector. Shares are up 6.3% year-to-date as of the close of trading on Tuesday. Currently there is 1 analyst who rates RRSat Global Communications Network a buy, no analysts rate it a sell, and 1 rates it a hold.STOCKS TO BUY: TheStreet Quant Ratings has identified a handful of stocks that can potentially TRIPLE in the next 12 months. Learn more.TheStreet Ratings rates RRSat Global Communications Network as a buy. The company's strengths can be seen in multiple areas, such as its increase in net income, revenue growth, largely solid financial position with reasonable debt levels by most measures, growth in earnings per share and increase in stock price during the past year. We feel these strengths outweigh the fact that the company has had somewhat disappointing return on equity.Highlights from TheStreet Ratings analysis on RRST go as follows:
- The net income growth from the same quarter one year ago has significantly exceeded that of the Media industry average, but is less than that of the S&P 500. The net income increased by 14.4% when compared to the same quarter one year prior, going from $1.57 million to $1.80 million.
- Despite its growing revenue, the company underperformed as compared with the industry average of 14.9%. Since the same quarter one year prior, revenues rose by 12.3%. This growth in revenue appears to have trickled down to the company's bottom line, improving the earnings per share.
- RRST 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. To add to this, RRST has a quick ratio of 1.60, which demonstrates the ability of the company to cover short-term liquidity needs.
- RRSAT GLOBAL COMM NTWRK LTD has improved earnings per share by 11.1% 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, RRSAT GLOBAL COMM NTWRK LTD reported lower earnings of $0.37 versus $0.48 in the prior year. This year, the market expects an improvement in earnings ($0.47 versus $0.37).
- The stock price has risen over the past year, but, despite its earnings growth and some other positive factors, it has underperformed the S&P 500 so far. Looking ahead, the stock's rise over the last year has already helped drive it to a level which is relatively expensive compared to the rest of its industry. We feel, however, that the other strengths this company displays justify these higher price levels.
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