3 Stocks Pushing The Telecommunications Industry Higher

Editor's Note: Any reference to TheStreet Ratings and its underlying recommendation does not reflect the opinion of TheStreet, Inc. or any of its contributors including Jim Cramer or Stephanie Link.

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.

STOCKS TO BUY: TheStreet Quant Ratings has identified a handful of stocks that can potentially TRIPLE in the next 12 months. Learn more.

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

STOCKS TO BUY: TheStreet Quant Ratings has identified a handful of stocks that can potentially TRIPLE in the next 12 months. Learn more.

At the close, RRSat Global Communications Network ( RRST) was up $0.17 (1.9%) to $9.29 on light volume. Throughout the day, 2,263 shares of RRSat Global Communications Network exchanged hands as compared to its average daily volume of 8,300 shares. The stock ranged in a price between $9.17-$9.37 after having opened the day at $9.37 as compared to the previous trading day's close of $9.12.

RRsat Global Communications Network Ltd. provides digital media management and distribution services for broadcasters and content owners in North America, Europe, Asia, Israel, the Middle East, and internationally. RRSat Global Communications Network has a market cap of $158.7 million and is part of the technology sector. Shares are up 8.6% year-to-date as of the close of trading on Friday. Currently there is 1 analyst who rates RRSat Global Communications Network a buy, no analysts rate it a sell, and 1 rates it a hold.

STOCKS TO BUY: TheStreet Quant Ratings has identified a handful of stocks that can potentially TRIPLE in the next 12 months. Learn more.

TheStreet Ratings rates RRSat Global Communications Network 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 and good cash flow from operations. We feel these strengths outweigh the fact that the company has had somewhat disappointing return on equity.

Highlights from TheStreet Ratings analysis on RRST go as follows:

  • Despite its growing revenue, the company underperformed as compared with the industry average of 14.9%. Since the same quarter one year prior, revenues rose by 10.6%. 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.
  • RRST 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. To add to this, RRST has a quick ratio of 1.68, which demonstrates the ability of the company to cover short-term liquidity needs.
  • Net operating cash flow has significantly increased by 190.92% to $8.11 million when compared to the same quarter last year. In addition, RRSAT GLOBAL COMM NTWRK LTD has also vastly surpassed the industry average cash flow growth rate of 5.70%.
  • RRSAT GLOBAL COMM NTWRK LTD's earnings per share declined by 14.3% in the most recent quarter compared to the same quarter a year ago. The company has suffered a declining pattern of earnings per share over the past year. However, we anticipate this trend reversing over the coming year. During the past fiscal year, RRSAT GLOBAL COMM NTWRK LTD reported lower earnings of $0.37 versus $0.48 in the prior year. This year, the market expects an improvement in earnings ($0.56 versus $0.37).
  • The change in net income from the same quarter one year ago has exceeded that of the Media industry average, but is less than that of the S&P 500. The net income has decreased by 12.8% when compared to the same quarter one year ago, dropping from $2.43 million to $2.12 million.

You can view the full analysis from the report here: RRSat Global Communications Network Ratings Report

STOCKS TO BUY: TheStreet Quant Ratings has identified a handful of stocks that can potentially TRIPLE in the next 12 months. Learn more.

Maxcom Telecomunicaciones SAB de CV ( MXT) was another company that pushed the Telecommunications industry higher today. Maxcom Telecomunicaciones SAB de CV was up $0.12 (7.1%) to $1.81 on light volume. Throughout the day, 4,472 shares of Maxcom Telecomunicaciones SAB de CV exchanged hands as compared to its average daily volume of 30,100 shares. The stock ranged in a price between $1.73-$1.88 after having opened the day at $1.73 as compared to the previous trading day's close of $1.69.

Maxcom Telecomunicaciones, S.A.B. de C.V., an integrated telecommunication services operator, provides voice and data services to residential and small and medium-sized business customers in Mexico. Maxcom Telecomunicaciones SAB de CV has a market cap of $194.6 million and is part of the technology sector. Shares are up 3.7% year-to-date as of the close of trading on Friday. Currently there are no analysts who rate Maxcom Telecomunicaciones SAB de CV a buy, no analysts rate it a sell, and 1 rates it a hold.

TheStreet Ratings rates Maxcom Telecomunicaciones SAB de CV as a sell. The company's weaknesses can be seen in multiple areas, such as its deteriorating net income, disappointing return on equity, weak operating cash flow, generally high debt management risk and generally disappointing historical performance in the stock itself.

Highlights from TheStreet Ratings analysis on MXT go as follows:

  • 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 Diversified Telecommunication Services industry. The net income has significantly decreased by 326.8% when compared to the same quarter one year ago, falling from $2.97 million to -$6.74 million.
  • The company's current return on equity has slightly decreased from the same quarter one year prior. This implies a minor weakness in the organization. Compared to other companies in the Diversified Telecommunication Services industry and the overall market, MAXCOM TELECOMUNICACIONES SA's return on equity significantly trails that of both the industry average and the S&P 500.
  • Net operating cash flow has decreased to $9.47 million or 36.50% when compared to the same quarter last year. In addition, when comparing the cash generation rate to the industry average, the firm's growth is significantly lower.
  • Even though the current debt-to-equity ratio is 1.21, it is still below the industry average, suggesting that this level of debt is acceptable within the Diversified Telecommunication Services industry. Even though the debt-to-equity ratio shows mixed results, the company's quick ratio of 0.32 is very low and demonstrates very weak liquidity.
  • The share price of MAXCOM TELECOMUNICACIONES SA has not done very well: it is down 21.40% and has underperformed the S&P 500, in part reflecting the company's sharply declining earnings per share when compared to the year-earlier quarter. The fact that the stock is now selling for less than others in its industry in relation to its current earnings is not reason enough to justify a buy rating at this time.

You can view the full analysis from the report here: Maxcom Telecomunicaciones SAB de CV Ratings Report

STOCKS TO BUY: TheStreet Quant Ratings has identified a handful of stocks that can potentially TRIPLE in the next 12 months. Learn more.

Editor's Note: Any reference to TheStreet Ratings and its underlying recommendation does not reflect the opinion of TheStreet, Inc. or any of its contributors including Jim Cramer or Stephanie Link.

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