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

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 Telecommunications industry higher today making it today's featured telecommunications winner. The industry as a whole closed the day up 1.6%. By the end of trading, LM Ericsson Telephone Company rose $0.29 (2.7%) to $11.14 on average volume. Throughout the day, 4,162,580 shares of LM Ericsson Telephone Company exchanged hands as compared to its average daily volume of 3,417,500 shares. The stock ranged in a price between $10.92-$11.16 after having opened the day at $11.09 as compared to the previous trading day's close of $10.85. Other companies within the Telecommunications industry that increased today were: Allot Communications ( ALLT), up 17.0%, WPCS International ( WPCS), up 14.6%, InfoSonics Corporation ( IFON), up 11.6% and Elephant Talk Communications ( ETAK), up 9.1%.
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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 $36.9 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 10.7% year to date as of the close of trading on Monday. 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, solid stock price performance and expanding profit margins. We feel these strengths outweigh the fact that the company has had sub par growth in net income.

On the negative front, Mitel Networks Corporation ( MITL), down 6.4%, eOn Communications Corporation ( EONC), down 3.2%, Maxcom Telecomunicaciones S.A.B. de C.V ( MXT), down 2.8% and ORBCOMM ( ORBC), down 2.4%.

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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