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Why Mobile Telesystems (MBT) Stock Is Down Today

Stocks in this article: MBT

NEW YORK (TheStreet) -- Mobile Telesystems (MBT) was falling -5.5% to $17.96 Monday as concerns about economic sanctions against Russia increased.

Western leaders threatened sanctions against Russia after the crash of Malaysia Airlines Flight 17 was tied to Russian supported rebels in Ukraine. The threat of sanctions caused many Russian stocks to fall, including Mobile Telesystems, VimpelCom (VIP), and Yandex (YNDX), according to MarketWatch.

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TheStreet Ratings team rates MOBILE TELESYSTEMS OJSC as a Buy with a ratings score of B. TheStreet Ratings Team has this to say about their recommendation:

"We rate MOBILE TELESYSTEMS OJSC (MBT) a BUY. This is driven by a number of strengths, which we believe should have a greater impact than any weaknesses, and should give investors a better performance opportunity than most stocks we cover. The company's strengths can be seen in multiple areas, such as its notable return on equity, expanding profit margins and good cash flow from operations. We feel these strengths outweigh the fact that the company has had sub par growth in net income."

Highlights from the analysis by TheStreet Ratings Team goes as follows:

  • 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 Wireless Telecommunication Services industry and the overall market, MOBILE TELESYSTEMS OJSC's return on equity significantly exceeds that of both the industry average and the S&P 500.
  • The gross profit margin for MOBILE TELESYSTEMS OJSC is currently very high, coming in at 71.99%. It has increased from the same quarter the previous year. Despite the strong results of the gross profit margin, MBT's net profit margin of 13.35% significantly trails the industry average.
  • Net operating cash flow has slightly increased to $1,239.63 million or 6.04% when compared to the same quarter last year. Despite an increase in cash flow, MOBILE TELESYSTEMS OJSC's average is still marginally south of the industry average growth rate of 12.89%.
  • MOBILE TELESYSTEMS OJSC's earnings per share declined by 11.9% 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, MOBILE TELESYSTEMS OJSC increased its bottom line by earning $2.34 versus $1.04 in the prior year. This year, the market expects an improvement in earnings ($67.24 versus $2.34).
  • MBT, with its decline in revenue, underperformed when compared the industry average of 2.7%. Since the same quarter one year prior, revenues slightly dropped by 8.3%. The declining revenue appears to have seeped down to the company's bottom line, decreasing earnings per share.
  • You can view the full analysis from the report here: MBT Ratings Report

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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.

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