LM Ericsson Telephone Company (ERIC): Today's Featured Technology 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

LM Ericsson Telephone Company ( ERIC) pushed the Technology sector lower today making it today's featured Technology laggard. The sector as a whole closed the day up 1.3%. By the end of trading, LM Ericsson Telephone Company fell $0.22 (-1.8%) to $12.13 on light volume. Throughout the day, 3,152,743 shares of LM Ericsson Telephone Company exchanged hands as compared to its average daily volume of 4,654,400 shares. The stock ranged in price between $12.09-$12.24 after having opened the day at $12.21 as compared to the previous trading day's close of $12.35. Other companies within the Technology sector that declined today were: Deltathree ( DDDC), down 18.0%, Aviat Networks ( AVNW), down 13.5%, NII Holdings ( NIHD), down 10.7% and AU Optronics Corporation ( AUO), down 9.2%.
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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. LM Ericsson Telephone Company has a market cap of $40.7 billion and is part of the telecommunications industry. The company has a P/E ratio of 15.8, below the S&P 500 P/E ratio of 17.7. Shares are up 22.3% year to date as of the close of trading on Wednesday. Currently there are 4 analysts that rate LM Ericsson Telephone Company a buy, 2 analysts rate it a sell, and 6 rate it a hold.

TheStreet Ratings rates LM 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 positive front, Kingtone Wirelessinfo Solution ( KONE), down 33.3%, Yelp Inc Class A ( YELP), down 27.4%, WPCS International ( WPCS), down 23.3% and SunPower Corporation ( SPWR), down 17.6% , were all gainers within the technology sector with EMC Corporation ( EMC) being today's featured technology sector leader.

For investors not wanting singular stock exposure, ETFs may be of interest. Investors who are bullish on the technology sector could consider Technology Select Sector SPDR ( XLK) while those bearish on the technology sector could consider ProShares Ultra Short Technology ( REW).

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