Equinix Inc. (EQIX): 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.

Equinix ( EQIX) pushed the Telecommunications industry lower today making it today's featured Telecommunications laggard. The industry as a whole closed the day down 0.4%. By the end of trading, Equinix fell $6.61 (-3.3%) to $191.46 on average volume. Throughout the day, 1.1 million shares of Equinix exchanged hands as compared to its average daily volume of 947,600 shares. The stock ranged in price between $190.76-$199.12 after having opened the day at $198.12 as compared to the previous trading day's close of $198.07. Other companies within the Telecommunications industry that declined today were: Motricity ( MOTR), down 11.7%, Elephant Talk Communications ( ETAK), down 9.8%, RIT Technologies ( RITT), down 8.1%, and magicJack VocalTec ( CALL), down 6.8%.
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Equinix, Inc. provides data center services to protect and connect the information assets for the enterprises, financial services companies, and content and network providers primarily in the Americas, Europe, the Middle-East, Africa, and the Asia-Pacific. Equinix has a market cap of $9.68 billion and is part of the technology sector. The company has a P/E ratio of 101.5, above the average telecommunications industry P/E ratio of 101 and above the S&P 500 P/E ratio of 17.7. Shares are up 95.3% year to date as of the close of trading on Tuesday. Currently there are 16 analysts that rate Equinix a buy, no analysts rate it a sell, and four rate it a hold.

TheStreet Ratings rates Equinix as a buy. The company's strengths can be seen in multiple areas, such as its growth in earnings per share, compelling growth in net income, robust revenue growth, good cash flow from operations and expanding profit margins. We feel these strengths outweigh the fact that the company has had generally high debt management risk by most measures that we evaluated.

On the positive front, Zoom Technologies ( ZOOM), up 12.4%, Nexxus Lighting ( NEXS), up 10.2%, eOn Communications Corporation ( EONC), up 4.8%, and Telestone Technologies Corporation ( TSTC), up 4.7%, were all gainers within the telecommunications industry with American Tower ( AMT) 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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