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 1.5% versus the S&P 500, which was down 0.7%. Laggards within the Telecommunications industry included Optical Cable ( OCC), down 3.5%, Internet Gold Golden Lines ( IGLD), down 1.6%, Net Element ( NETE), down 8.0%, RIT Technologies ( RITT), down 4.1% and Voltari ( VLTC), down 4.0%. TheStreet Ratings Group would like to highlight 3 stocks that pushed the industry lower today: TELUS ( TU) is one of the companies that pushed the Telecommunications industry lower today. TELUS was down $0.81 (2.2%) to $36.02 on heavy volume. Throughout the day, 330,748 shares of TELUS exchanged hands as compared to its average daily volume of 130,400 shares. The stock ranged in price between $35.66-$36.71 after having opened the day at $36.67 as compared to the previous trading day's close of $36.83. TELUS Corporation provides a range of telecommunications services and products in Canada. The company operates through two segments, Wireless and Wireline. TELUS has a market cap of $23.1 billion and is part of the technology sector. Shares are up 6.9% year-to-date as of the close of trading on Monday. Currently there are 5 analysts who rate TELUS a buy, no analysts rate it a sell, and 2 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 TELUS as a hold. The company's strengths can be seen in multiple areas, such as its revenue growth, notable return on equity and solid stock price performance. However, as a counter to these strengths, we also find weaknesses including weak operating cash flow and generally higher debt management risk. Highlights from TheStreet Ratings analysis on TU go as follows:
- TU's revenue growth has slightly outpaced the industry average of 3.3%. Since the same quarter one year prior, revenues slightly increased by 4.8%. This growth in revenue appears to have trickled down to the company's bottom line, improving the earnings per share.
- 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. We feel that the combination of its price rise over the last year and its current price-to-earnings ratio relative to its industry tend to reduce its upside potential.
- Even though the current debt-to-equity ratio is 1.01, 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 0.44 is very low and demonstrates very weak liquidity.
- Net operating cash flow has decreased to $598.00 million or 17.96% 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.
- 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 62.10%, 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.