3 Stocks Pushing The Telecommunications Industry Higher

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All three major indices traded up today with the Dow Jones Industrial Average ( ^DJI) trading up 27 points (0.2%) at 16,518 as of Monday, May 19, 2014, 3:55 PM ET. The NYSE advances/declines ratio sits at 1,874 issues advancing vs. 1,111 declining with 157 unchanged.

The Telecommunications industry as a whole closed the day up 0.8% versus the S&P 500, which was up 0.4%. Top gainers within the Telecommunications industry included Maxcom Telecomunicaciones SAB de CV ( MXT), up 7.1%, RRSat Global Communications Network ( RRST), up 1.9%, RELM Wireless ( RWC), up 1.8%, Communications Systems ( JCS), up 1.6% and Frequency Electronics ( FEIM), up 2.1%.

TheStreet Ratings Group would like to highlight 3 stocks pushing the industry higher today:

RELM Wireless ( RWC) is one of the companies that pushed the Telecommunications industry higher today. RELM Wireless was up $0.06 (1.8%) to $3.42 on heavy volume. Throughout the day, 80,736 shares of RELM Wireless exchanged hands as compared to its average daily volume of 23,800 shares. The stock ranged in a price between $3.34-$3.54 after having opened the day at $3.34 as compared to the previous trading day's close of $3.36.

RELM Wireless Corporation designs, manufactures, and markets wireless communications products under the BK Radio and RELM brand names in the United States and internationally. Its products include two-way land mobile radios, repeaters, base stations, and related components and subsystems. RELM Wireless has a market cap of $43.8 million and is part of the technology sector. Shares are down 4.8% year-to-date as of the close of trading on Friday. Currently there are no analysts who rate RELM Wireless a buy, no analysts rate it a sell, and none rate it a hold.

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TheStreet Ratings rates RELM Wireless as a hold. 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 and expanding profit margins. However, as a counter to these strengths, we also find weaknesses including a generally disappointing performance in the stock itself, feeble growth in the company's earnings per share and deteriorating net income.

Highlights from TheStreet Ratings analysis on RWC go as follows:

  • RWC's revenue growth has slightly outpaced the industry average of 2.3%. Since the same quarter one year prior, revenues slightly increased by 6.8%. This growth in revenue does not appear to have trickled down to the company's bottom line, displayed by a decline in earnings per share.
  • RWC has no debt to speak of therefore resulting in a debt-to-equity ratio of zero, which we consider to be a relatively favorable sign. Along with this, the company maintains a quick ratio of 4.39, which clearly demonstrates the ability to cover short-term cash needs.
  • 46.74% is the gross profit margin for RELM WIRELESS CORP which we consider to be strong. Regardless of RWC's high profit margin, it has managed to decrease from the same period last year. Despite the mixed results of the gross profit margin, RWC's net profit margin of 0.42% is significantly lower than the industry average.
  • RELM WIRELESS CORP has experienced a steep decline in earnings per share in the most recent quarter in comparison to its performance from the same quarter a year ago. The company has suffered a declining pattern earnings per share over the past two years. During the past fiscal year, RELM WIRELESS CORP reported lower earnings of $0.08 versus $0.16 in the prior year.
  • The company, on the basis of change in net income from the same quarter one year ago, has significantly underperformed when compared to that of the S&P 500 and the Communications Equipment industry. The net income has significantly decreased by 92.3% when compared to the same quarter one year ago, falling from $0.34 million to $0.03 million.

You can view the full analysis from the report here: RELM Wireless Ratings Report

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