Ericsson Telephone Company (ERIC): Telecommunications' Featured Stock Of The Day

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.

Ericsson Telephone Company ( ERIC) pushed the Telecommunications industry higher today making it today's featured telecommunications winner. The industry as a whole closed the day up 0.4%. By the end of trading, Ericsson Telephone Company rose 22 cents (1.8%) to $12.44 on average volume. Throughout the day, 4.9 million shares of Ericsson Telephone Company exchanged hands as compared to its average daily volume of 5.5 million shares. The stock ranged in a price between $12.25-$12.45 after having opened the day at $12.27 as compared to the previous trading day's close of $12.22. Other companies within the Telecommunications industry that increased today were: B Communications ( BCOM), up 8.1%, Zhone Technologies ( ZHNE), up 6.7%, Partner Communications Company ( PTNR), up 6.1%, and Level three Communications ( LVLT), up 6%.
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Ericsson provides telecommunications equipment and services to mobile and fixed network operators worldwide. It operates in four segments: Networks, Global Services, Support Solutions, and ST-Ericsson. Ericsson Telephone Company has a market cap of $39 billion and is part of the technology sector. The company has a P/E ratio of 15.8, below the S&P 500 P/E ratio of 17.7. Shares are up 21% year to date as of the close of trading on Monday. Currently there are four analysts that rate Ericsson Telephone Company a buy, one analyst rates it a sell, and six rate it a hold.

TheStreet Ratings rates Ericsson Telephone Company as a buy. The company's strengths can be seen in multiple areas, such as its revenue growth, largely solid financial position with reasonable debt levels by most measures, good cash flow from operations, expanding profit margins and solid stock price performance. We feel these strengths outweigh the fact that the company has had sub par growth in net income.

On the negative front, Dialogic ( DLGC), down 10.5%, Telestone Technologies Corporation ( TSTC), down 5.3%, Mitel Networks Corporation ( MITL), down 5.1%, and Glowpoint ( GLOW), down 5.1%, were all laggards within the telecommunications industry with VeriSign ( VRSN) being today's telecommunications industry laggard.

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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