Acme Packet Inc. (APKT): Today's Featured Telecommunications Laggard

Editor's Note: TheStreet ratings do not represent the views of TheStreet's staff or its contributors. Ratings are established by computer based on metrics for performance (which includes growth, stock performance, efficiency and valuation) and risk (volatility and solvency). Companies with poor cash flow or high debt levels tend to earn lower ratings in our model.

Acme Packet ( APKT) pushed the Telecommunications industry lower today making it today's featured Telecommunications laggard. The industry as a whole closed the day up 0.8%. By the end of trading, Acme Packet fell 91 cents (-5.2%) to $16.55 on average volume. Throughout the day, three million shares of Acme Packet exchanged hands as compared to its average daily volume of 2.5 million shares. The stock ranged in price between $16.41-$17.48 after having opened the day at $17.32 as compared to the previous trading day's close of $17.46. Other companies within the Telecommunications industry that declined today were: Mitel Networks Corporation ( MITL), down 7.6%, NTS ( NTS), down 7.6%, RIT Technologies ( RITT), down 6.2%, and Globalstar Incorporated ( GSAT), down 5.4%.

Acme Packet, Inc. provides session delivery network solutions that enable the delivery of voice, video, data, and unified communications services and applications across Internet protocol (IP) networks. Acme Packet has a market cap of $1.17 billion and is part of the technology sector. The company has a P/E ratio of 63.2, equal to the average telecommunications industry P/E ratio and above the S&P 500 P/E ratio of 17.7. Shares are down 43.5% year to date as of the close of trading on Thursday. Currently there is one analyst that rates Acme Packet a buy, two analysts rate it a sell, and 15 rate it a hold.

TheStreet Ratings rates Acme Packet 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, good cash flow from operations and expanding profit margins. However, as a counter to these strengths, we also find weaknesses including a generally disappointing performance in the stock itself, feeble growth in the company's earnings per share and deteriorating net income.

On the positive front, MER Telemanagement Solutions ( MTSL), up 40.6%, B Communications ( BCOM), up 10.6%, Neonode ( NEON), up 8.5%, and NII Holdings ( NIHD), up 8.1%, were all gainers within the telecommunications industry with Qualcomm ( QCOM) 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).

If you liked this article you might like

Wall Street Should Accept What Oracle Has Become

Ciena's Heading to $30

Adtran's Adding 'ProValue' Ahead of Earnings

It's Time to Believe in Ciena

Clearing Up My Position on Alcatel-Lucent