3 Stocks Pushing The Telecommunications Industry Lower - TheStreet

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The Telecommunications industry as a whole closed the day up 0.8% versus the S&P 500, which was up 0.1%. Laggards within the Telecommunications industry included

Voltari

(

VLTC

), down 5.2%,

Glowpoint

(

GLOW

), down 1.7%,

Gilat Satellite Networks

(

GILT

), down 2.4%,

Nortel Inversora

(

NTL

), down 2.2% and

ClearOne

(

CLRO

), down 2.0%.

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

Nortel Inversora

(

NTL

) is one of the companies that pushed the Telecommunications industry lower today. Nortel Inversora was down $0.50 (2.2%) to $22.40 on light volume. Throughout the day, 104 shares of Nortel Inversora exchanged hands as compared to its average daily volume of 5,500 shares. The stock ranged in price between $22.40-$22.40 after having opened the day at $22.40 as compared to the previous trading day's close of $22.90.

Nortel Inversora S.A., through its subsidiary, Telecom Argentina S.A., provides fixed-line public and mobile telecommunication services. It operates through three segments: Fixed Services, Personal Mobile Services, and Nucleo Mobile Services. Nortel Inversora has a market cap of $3.1 billion and is part of the technology sector. Shares are up 15.1% year-to-date as of the close of trading on Wednesday.

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TheStreet Ratings rates

Nortel Inversora

as a

hold

. The company's strengths can be seen in multiple areas, such as its largely solid financial position with reasonable debt levels by most measures, expanding profit margins and increase in stock price during the past year. However, as a counter to these strengths, we also find weaknesses including deteriorating net income, weak operating cash flow and feeble growth in the company's earnings per share.

Highlights from TheStreet Ratings analysis on NTL go as follows:

  • NTL's debt-to-equity ratio is very low at 0.04 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 0.82 is somewhat weak and could be cause for future problems.
  • 35.82% is the gross profit margin for NORTEL INVERSORA SA which we consider to be strong. Regardless of NTL's high profit margin, it has managed to decrease from the same period last year. Despite the mixed results of the gross profit margin, the net profit margin of 6.22% trails the industry average.
  • NTL, with its decline in revenue, underperformed when compared the industry average of 0.6%. Since the same quarter one year prior, revenues fell by 17.5%. The declining revenue appears to have seeped down to the company's bottom line, decreasing earnings per share.
  • The company, on the basis of change in net income from the same quarter one year ago, has underperformed when compared to that of the S&P 500 and the Diversified Telecommunication Services industry average. The net income has decreased by 1.7% when compared to the same quarter one year ago, dropping from $61.80 million to $60.76 million.
  • Net operating cash flow has significantly decreased to $88.25 million or 75.66% when compared to the same quarter last year. In addition, when comparing to the industry average, the firm's growth rate is much lower.

You can view the full analysis from the report here:

Nortel Inversora Ratings Report

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At the close,

Gilat Satellite Networks

(

GILT

) was down $0.12 (2.4%) to $4.92 on light volume. Throughout the day, 8,940 shares of Gilat Satellite Networks exchanged hands as compared to its average daily volume of 18,300 shares. The stock ranged in price between $4.92-$4.95 after having opened the day at $4.95 as compared to the previous trading day's close of $5.04.

Gilat Satellite Networks Ltd. and its subsidiaries provide Internet protocol (IP) based digital satellite communication and networking products and services worldwide. It designs, produces, and markets very small aperture terminals (VSATs) and related VSAT network equipment. Gilat Satellite Networks has a market cap of $216.7 million and is part of the technology sector. Shares are up 9.7% year-to-date as of the close of trading on Wednesday.

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TheStreet Ratings rates

Gilat Satellite Networks

as a

sell

. Among the areas we feel are negative, one of the most important has been weak operating cash flow.

Highlights from TheStreet Ratings analysis on GILT go as follows:

  • Net operating cash flow has significantly decreased to -$9.88 million or 793.66% when compared to the same quarter last year. In addition, when comparing to the industry average, the firm's growth rate is much lower.
  • Current return on equity exceeded its ROE from the same quarter one year prior. This is a clear sign of strength within the company. Compared to other companies in the Communications Equipment industry and the overall market, GILAT SATELLITE NETWORKS LTD's return on equity significantly trails that of both the industry average and the S&P 500.
  • 39.47% is the gross profit margin for GILAT SATELLITE NETWORKS LTD which we consider to be strong. Regardless of GILT's high profit margin, it has managed to decrease from the same period last year. Despite the mixed results of the gross profit margin, GILT's net profit margin of 0.30% is significantly lower than the industry average.
  • Compared to where it was 12 months ago, the stock is up, but it has so far lagged the appreciation in the S&P 500. Turning our attention to the future direction of the stock, we do not believe this stock offers ample reward opportunity to compensate for the risks, despite the fact that it rose over the past year.
  • GILAT SATELLITE NETWORKS LTD 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, GILAT SATELLITE NETWORKS LTD continued to lose money by earning -$0.23 versus -$0.55 in the prior year.

You can view the full analysis from the report here:

Gilat Satellite Networks Ratings Report

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Glowpoint

(

GLOW

) was another company that pushed the Telecommunications industry lower today. Glowpoint was down $0.02 (1.7%) to $1.28 on average volume. Throughout the day, 34,049 shares of Glowpoint exchanged hands as compared to its average daily volume of 36,300 shares. The stock ranged in price between $1.25-$1.33 after having opened the day at $1.31 as compared to the previous trading day's close of $1.30.

Glowpoint has a market cap of $47.3 million and is part of the technology sector. Shares are down 4.3% year-to-date as of the close of trading on Wednesday.

STOCKS TO BUY: TheStreet Quant Ratings has identified a handful of stocks that can potentially TRIPLE in the next 12 months. Learn more.