3 Stocks Pushing The Telecommunications Industry Lower

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The Telecommunications industry as a whole closed the day down 0.4% versus the S&P 500, which was down 0.3%. Laggards within the Telecommunications industry included Optical Cable ( OCC), down 2.9%, Glowpoint ( GLOW), down 3.9%, RIT Technologies ( RITT), down 3.9%, RRSat Global Communications Network ( RRST), down 2.4% and Communications Systems ( JCS), down 2.0%.

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

RRSat Global Communications Network ( RRST) is one of the companies that pushed the Telecommunications industry lower today. RRSat Global Communications Network was down $0.21 (2.4%) to $8.72 on light volume. Throughout the day, 2,689 shares of RRSat Global Communications Network exchanged hands as compared to its average daily volume of 11,500 shares. The stock ranged in price between $8.72-$8.95 after having opened the day at $8.92 as compared to the previous trading day's close of $8.93.

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 $155.6 million and is part of the technology sector. Shares are up 6.3% year-to-date as of the close of trading on Tuesday. 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, growth in earnings per share and increase in stock price during the past year. 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.
  • 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).
  • The stock price has risen over the past year, but, despite its earnings growth and some other positive factors, it has underperformed the S&P 500 so far. 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.

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

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At the close, RIT Technologies ( RITT) was down $0.06 (3.9%) to $1.34 on average volume. Throughout the day, 54,924 shares of RIT Technologies exchanged hands as compared to its average daily volume of 52,200 shares. The stock ranged in price between $1.30-$1.42 after having opened the day at $1.42 as compared to the previous trading day's close of $1.39.

RiT Technologies Ltd. provides intelligent infrastructure management (IIM) and indoor optical wireless technology solutions. Its IIM products enhance security and network utilization for data centers, communication rooms, and work space environments. RIT Technologies has a market cap of $18.6 million and is part of the technology sector. Shares are down 20.7% year-to-date as of the close of trading on Tuesday.

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TheStreet Ratings rates RIT Technologies as a sell. Among the areas we feel are negative, one of the most important has been a generally disappointing historical performance in the stock itself.

Highlights from TheStreet Ratings analysis on RITT go as follows:

  • RITT's stock share price has done very poorly compared to where it was a year ago: Despite any rallies, the net result is that it is down by 63.25%, which is also worse that the performance of the S&P 500 Index. Investors have so far failed to pay much attention to the earnings improvements the company has managed to achieve over the last quarter. Naturally, the overall market trend is bound to be a significant factor. However, in one sense, the stock's sharp decline last year is a positive for future investors, making it cheaper (in proportion to its earnings over the past year) than most other stocks in its industry. But due to other concerns, we feel the stock is still not a good buy right now.
  • The company's current return on equity greatly increased when compared to its ROE from the same quarter one year prior. This is a signal of significant strength within the corporation. Compared to other companies in the Communications Equipment industry and the overall market, RIT TECHNOLOGIES LTD's return on equity significantly trails that of both the industry average and the S&P 500.
  • Despite currently having a low debt-to-equity ratio of 0.35, it is higher than that of the industry average, inferring that management of debt levels may need to be evaluated further. Despite the fact that RITT's debt-to-equity ratio is mixed in its results, the company's quick ratio of 1.89 is high and demonstrates strong liquidity.
  • 40.28% is the gross profit margin for RIT TECHNOLOGIES LTD which we consider to be strong. It has increased from the same quarter the previous year. Regardless of the strong results of the gross profit margin, the net profit margin of -93.84% is in-line with the industry average.
  • RIT TECHNOLOGIES LTD reported significant earnings per share improvement in the most recent quarter compared to the same quarter a year ago. The company has demonstrated a pattern of positive earnings per share growth over the past year. During the past fiscal year, RIT TECHNOLOGIES LTD continued to lose money by earning -$1.05 versus -$1.92 in the prior year.

You can view the full analysis from the report here: RIT Technologies 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.

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, 20,068 shares of Glowpoint exchanged hands as compared to its average daily volume of 34,200 shares. The stock ranged in price between $1.47-$1.56 after having opened the day at $1.56 as compared to the previous trading day's close of $1.55.

Glowpoint has a market cap of $53.6 million and is part of the technology sector. Shares are up 12.3% year-to-date as of the close of trading on Tuesday.

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

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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