The Telecommunications industry as a whole closed the day down 0.7% versus the S&P 500, which was down 1.0%. Laggards within the Telecommunications industry included

Glowpoint

(

GLOW

), down 6.6%,

Nortel Inversora

(

NTL

), down 2.2%,

Communications Systems

(

JCS

), down 1.9%,

Inventergy Global

(

INVT

), down 10.2% and

Envivio

(

ENVI

), down 2.2%.

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

Communications Systems

(

JCS

) is one of the companies that pushed the Telecommunications industry lower today. Communications Systems was down $0.19 (1.9%) to $9.59 on light volume. Throughout the day, 781 shares of Communications Systems exchanged hands as compared to its average daily volume of 8,100 shares. The stock ranged in price between $9.59-$9.67 after having opened the day at $9.67 as compared to the previous trading day's close of $9.78.

Communications Systems, Inc., together with its subsidiaries, manufactures and sells modular connecting and wiring devices, digital subscriber line filters, structured wiring systems, and media and rate conversion products primarily in North America, Europe, the Middle East, and Africa. Communications Systems has a market cap of $85.4 million and is part of the technology sector. Shares are down 6.9% year-to-date as of the close of trading on Monday.

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TheStreet Ratings rates

Communications Systems

as a

sell

. The company's weaknesses can be seen in multiple areas, such as its deteriorating net income, disappointing return on equity, poor profit margins, weak operating cash flow and generally disappointing historical performance in the stock itself.

Highlights from TheStreet Ratings analysis on JCS 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 Communications Equipment industry. The net income has significantly decreased by 2853.2% when compared to the same quarter one year ago, falling from -$0.14 million to -$4.16 million.
  • The company's current return on equity has slightly decreased from the same quarter one year prior. This implies a minor weakness in the organization. Compared to other companies in the Communications Equipment industry and the overall market, COMMUNICATIONS SYSTEMS INC's return on equity significantly trails that of both the industry average and the S&P 500.
  • The gross profit margin for COMMUNICATIONS SYSTEMS INC is currently lower than what is desirable, coming in at 28.87%. It has decreased from the same quarter the previous year. Along with this, the net profit margin of -21.30% is significantly below that of the industry average.
  • Net operating cash flow has significantly decreased to -$2.88 million or 149.40% when compared to the same quarter last year. In addition, when comparing to the industry average, the firm's growth rate is much lower.
  • The share price of COMMUNICATIONS SYSTEMS INC has not done very well: it is down 8.29% 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. 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.

You can view the full analysis from the report here:

Communications Systems Ratings Report

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At the close,

Nortel Inversora

(

NTL

) was down $0.39 (2.2%) to $17.24 on light volume. Throughout the day, 2,147 shares of Nortel Inversora exchanged hands as compared to its average daily volume of 3,500 shares. The stock ranged in price between $17.16-$17.52 after having opened the day at $17.52 as compared to the previous trading day's close of $17.63.

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 $2.3 billion and is part of the technology sector. Shares are down 16.0% year-to-date as of the close of trading on Monday.

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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 revenue growth, reasonable valuation levels and increase in net income. However, as a counter to these strengths, we also find weaknesses including disappointing return on equity, weak operating cash flow and a generally disappointing performance in the stock itself.

Highlights from TheStreet Ratings analysis on NTL go as follows:

  • The revenue growth came in higher than the industry average of 5.9%. Since the same quarter one year prior, revenues slightly increased by 7.0%. This growth in revenue appears to have trickled down to the company's bottom line, improving the earnings per share.
  • NTL's debt-to-equity ratio is very low at 0.13 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 0.72 is somewhat weak and could be cause for future problems.
  • The company's current return on equity has slightly decreased from the same quarter one year prior. This implies a minor weakness in the organization. In comparison to the other companies in the Diversified Telecommunication Services industry and the overall market, NORTEL INVERSORA SA's return on equity is significantly below that of the industry average and is below that of the S&P 500.
  • Net operating cash flow has decreased to $131.98 million or 16.27% 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.

You can view the full analysis from the report here:

Nortel Inversora Ratings Report

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Glowpoint

(

GLOW

) was another company that pushed the Telecommunications industry lower today. Glowpoint was down $0.05 (6.6%) to $0.71 on light volume. Throughout the day, 5,706 shares of Glowpoint exchanged hands as compared to its average daily volume of 8,900 shares. The stock ranged in price between $0.70-$0.73 after having opened the day at $0.73 as compared to the previous trading day's close of $0.76.

Glowpoint has a market cap of $26.1 million and is part of the technology sector. Shares are down 30.9% year-to-date as of the close of trading on Monday.

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