Telefonica Brasil S.A. (VIV): 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.

Telefonica Brasil S.A ( VIV) pushed the Telecommunications industry lower today making it today's featured Telecommunications laggard. The industry as a whole closed the day down 0.3%. By the end of trading, Telefonica Brasil S.A fell 37 cents (-1.5%) to $24.29 on average volume. Throughout the day, 1.4 million shares of Telefonica Brasil S.A exchanged hands as compared to its average daily volume of 1.8 million shares. The stock ranged in price between $24.21-$24.67 after having opened the day at $24.67 as compared to the previous trading day's close of $24.66. Other companies within the Telecommunications industry that declined today were: Powerwave Technologies ( PWAV), down 12.5%, Oi ( OIBR), down 9.6%, Vocera Communications ( VCRA), down 8%, and Envivio ( ENVI), down 5.4%.

Telefonica Brasil, S.A. provides fixed-line telecommunications services to residential and commercial customers in the state of Sao Paulo, Brazil. Telefonica Brasil S.A has a market cap of $27.4 billion and is part of the technology sector. The company has a P/E ratio of 6.5, below the average telecommunications industry P/E ratio of 9.3 and below the S&P 500 P/E ratio of 17.7. Shares are down 9.8% year to date as of the close of trading on Friday. Currently there are seven analysts that rate Telefonica Brasil S.A a buy, no analysts rate it a sell, and two rate it a hold.

TheStreet Ratings rates Telefonica Brasil S.A as a hold. The company's strengths can be seen in multiple areas, such as its attractive valuation levels, largely solid financial position with reasonable debt levels by most measures and expanding profit margins. However, as a counter to these strengths, we also find weaknesses including feeble growth in the company's earnings per share, unimpressive growth in net income and a generally disappointing performance in the stock itself.

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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