3 Stocks Pushing The Telecommunications Industry Lower

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.

The Telecommunications industry as a whole closed the day down 0.4% versus the S&P 500, which was unchanged. Laggards within the Telecommunications industry included Optical Cable ( OCC), down 1.9%, Net Element ( NETE), down 1.9%, Technical Communications ( TCCO), down 2.0%, Glowpoint ( GLOW), down 3.9% and RRSat Global Communications Network ( RRST), down 2.1%.

TheStreet Ratings Group would like to highlight 3 stocks that pushed the industry lower today:

Sky-mobi ( MOBI) is one of the companies that pushed the Telecommunications industry lower today. Sky-mobi was down $0.48 (6.9%) to $6.56 on light volume. Throughout the day, 583,091 shares of Sky-mobi exchanged hands as compared to its average daily volume of 1,050,500 shares. The stock ranged in price between $6.49-$7.03 after having opened the day at $7.03 as compared to the previous trading day's close of $7.05.

Sky-mobi Limited, through its subsidiaries, engages in the operation of a mobile application platform embedded on mobile phones to provide mobile application store and services in the People's Republic of China. Sky-mobi has a market cap of $216.3 million and is part of the technology sector. Shares are up 96.5% year-to-date as of the close of trading on Monday.

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TheStreet Ratings rates Sky-mobi as a hold. The company's strengths can be seen in multiple areas, such as its solid stock price performance, compelling growth in net income and largely solid financial position with reasonable debt levels by most measures. However, as a counter to these strengths, we find that the company's profit margins have been poor overall.

Highlights from TheStreet Ratings analysis on MOBI go as follows:

  • Compared to its closing price of one year ago, MOBI's share price has jumped by 103.61%, exceeding the performance of the broader market during that same time frame. Although MOBI had significant growth over the past year, our hold rating indicates that we do not recommend additional investment in this stock at the current time.
  • The net income growth from the same quarter one year ago has exceeded that of the S&P 500 and greatly outperformed compared to the Software industry average. The net income increased by 38.1% when compared to the same quarter one year prior, rising from $0.58 million to $0.80 million.
  • MOBI, with its decline in revenue, underperformed when compared the industry average of 7.5%. Since the same quarter one year prior, revenues fell by 18.9%. Weakness in the company's revenue seems to not be hurting the bottom line, shown by stable earnings per share.
  • Current return on equity exceeded its ROE from the same quarter one year prior. This is a clear sign of strength within the company. In comparison to the other companies in the Software industry and the overall market, SKY-MOBI LTD -ADR's return on equity is significantly below that of the industry average and is below that of the S&P 500.
  • The gross profit margin for SKY-MOBI LTD -ADR is rather low; currently it is at 23.60%. It has decreased significantly from the same period last year. Along with this, the net profit margin of 4.10% significantly trails the industry average.

You can view the full analysis from the report here: Sky-mobi Ratings Report

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At the close, RRSat Global Communications Network ( RRST) was down $0.19 (2.1%) to $8.99 on light volume. Throughout the day, 6,333 shares of RRSat Global Communications Network exchanged hands as compared to its average daily volume of 9,700 shares. The stock ranged in price between $8.55-$9.14 after having opened the day at $9.12 as compared to the previous trading day's close of $9.18.

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 $158.0 million and is part of the technology sector. Shares are up 8.4% year-to-date as of the close of trading on Monday. 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.

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TheStreet Ratings rates RRSat Global Communications Network as a buy. The company's strengths can be seen in multiple areas, such as its increase in net income, revenue growth, largely solid financial position with reasonable debt levels by most measures, increase in stock price during the past year and growth in earnings per share. 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:

  • The net income growth from the same quarter one year ago has significantly exceeded that of the Media industry average, but is less than that of the S&P 500. The net income increased by 14.4% when compared to the same quarter one year prior, going from $1.57 million to $1.80 million.
  • 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 12.3%. This growth in revenue appears to have trickled down to the company's bottom line, improving the 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 1.60, which demonstrates the ability of the company to cover short-term liquidity needs.
  • The stock has risen over the past year as investors have generally rewarded the company for its earnings growth and other positive factors like the ones we have cited in this report. Looking ahead, the stock's rise over the last year has already helped drive it to a level which is relatively expensive compared to the rest of its industry. We feel, however, that the other strengths this company displays justify these higher price levels.
  • RRSAT GLOBAL COMM NTWRK LTD has improved earnings per share by 11.1% in the most recent quarter compared to the same quarter a year ago. This company has reported somewhat volatile earnings recently. But, we feel it is poised for EPS growth in 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 ($0.47 versus $0.37).

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

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Glowpoint ( GLOW) was another company that pushed the Telecommunications industry lower today. Glowpoint was down $0.06 (3.9%) to $1.49 on light volume. Throughout the day, 29,373 shares of Glowpoint exchanged hands as compared to its average daily volume of 43,700 shares. The stock ranged in price between $1.48-$1.52 after having opened the day at $1.52 as compared to the previous trading day's close of $1.55.

Glowpoint has a market cap of $51.5 million and is part of the technology sector. Shares are up 5.1% year-to-date as of the close of trading on Monday.

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Highlights from TheStreet Ratings analysis on GLOW go as follows:

You can view the full analysis from the report here: Glowpoint 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.

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