NEW YORK (TheStreet) -- Shares of One Horizon Group (OHGI) were gaining 21.73% to $1.68 on heavy trading volume after the communications company's Aishuo app won an exclusive Voice over IP (VoIP) supply contract for Chinese satellite operator KeyIdea.
As part of the agreement the Aishuo platform will power the crew-call services in KeyIdea's new maritime satellite service that's scheduled to roll out in the fourth quarter of 2015. KeyIdea will purchase pre-paid calling cards from Aishuo which it will then resell to on-board crew.
All calls placed using the system will be carried through Aishuo's Public Switched Telephone Network and billed to crew on a pay-as-you-go basis.
"We were delighted to be able to showcase our solution to the newest entrant in the satellite sector here in China and with our track record of success in the Philippines and Indonesia, we were confident in winning this contract," One Horizon President CEO Brian Collins said in a statement.
About 5.2 million shares of One Horizon were traded by 10:26 a.m. Thursday, above the company's average trading volume of about 966,000 shares a day.
TheStreet Ratings team rates ONE HORIZON GROUP INC as a Sell with a ratings score of D. TheStreet Ratings Team has this to say about their recommendation:
"We rate ONE HORIZON GROUP INC (OHGI) a SELL. This is driven by some concerns, which we believe should have a greater impact than any strengths, and could make it more difficult for investors to achieve positive results compared to most of the stocks we cover. The company's weaknesses can be seen in multiple areas, such as its deteriorating net income, disappointing return on equity, generally disappointing historical performance in the stock itself and feeble growth in its earnings per share."
Highlights from the analysis by TheStreet Ratings Team goes 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 Diversified Telecommunication Services industry. The net income has significantly decreased by 140.5% when compared to the same quarter one year ago, falling from -$0.39 million to -$0.93 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 Diversified Telecommunication Services industry and the overall market, ONE HORIZON GROUP INC's return on equity significantly trails that of both the industry average and the S&P 500.
- Despite any intermediate fluctuations, we have only bad news to report on this stock's performance over the last year: it has tumbled by 63.32%, worse than the S&P 500's performance. Consistent with the plunge in the stock price, the company's earnings per share are down 50.00% 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.
- ONE HORIZON GROUP INC's earnings per share declined by 50.0% in the most recent quarter compared to the same quarter a year ago. The company has reported a trend of declining earnings per share over the past year. However, the consensus estimate suggests that this trend should reverse in the coming year. During the past fiscal year, ONE HORIZON GROUP INC swung to a loss, reporting -$0.07 versus $0.04 in the prior year. This year, the market expects an improvement in earnings (-$0.05 versus -$0.07).
- The revenue fell significantly faster than the industry average of 5.9%. Since the same quarter one year prior, revenues fell by 37.1%. 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: OHGI Ratings Report