Telefonica SA (TEF): Today's Featured Telecommunications Laggard

Telefonica ( TEF) pushed the Telecommunications industry lower today making it today's featured Telecommunications laggard. The industry as a whole closed the day down 1.1%. By the end of trading, Telefonica fell 66 cents (-5.8%) to $10.70 on light volume. Throughout the day, 3.2 million shares of Telefonica exchanged hands as compared to its average daily volume of 5.2 million shares. The stock ranged in price between $10.56-$11.08 after having opened the day at $10.80 as compared to the previous trading day's close of $11.36. Other company's within the Telecommunications industry that declined today were: Nexxus Lighting ( NEXS), down 41.6%, NTELOS Holdings ( NTLS), down 17.4%, Iridium Communications ( IRDM), down 17%, and Ubiquiti Networks ( UBNT), down 12%.

Telefonica, S.A. provides fixed and mobile telephony services primarily in Spain, Latin America, and rest of Europe. Telefonica has a market cap of $51.8 billion and is part of the technology sector. The company has a P/E ratio of 57.4, above the average telecommunications industry P/E ratio of 8.5 and above the S&P 500 P/E ratio of 17.7. Shares are down 33.9% year to date as of the close of trading on Wednesday. Currently there is one analyst that rates Telefonica a buy, no analysts rate it a sell, and four rate it a hold.

TheStreet Ratings rates Telefonica as a hold. The company's strengths can be seen in multiple areas, such as its attractive valuation levels and notable return on equity. However, as a counter to these strengths, we also find weaknesses including deteriorating net income, generally poor debt management and poor profit margins.

On the positive front, Cbeyond ( CBEY), up 16.9%, Frequency Electronics ( FEIM), up 8.8%, 8x8 ( EGHT), up 6.2%, and Atlantic Tele-Network ( ATNI), up 6%, were all gainers within the telecommunications industry with Equinix ( EQIX) being today's featured telecommunications industry leader.

For investors not wanting singular stock exposure, ETFs may be of interest. Investors who are bullish on the telecommunications industry could consider iShares Dow Jones US Telecom ( IYZ) while those bearish on the telecommunications industry could consider ProShares Ult Sht Telecommunication ( TLL).
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