3 Stocks Boosting 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.

One out of the three major indices traded up today The three major indices are trading lower today with the Dow Jones Industrial Average ( ^DJI) trading down 1.09 points (0.0%) at 17,086 as of Thursday, July 24, 2014, 3:55 PM ET. The NYSE advances/declines ratio sits at 1,410 issues advancing vs. 1,558 declining with 167 unchanged.

The Telecommunications industry as a whole closed the day down 0.1% versus the S&P 500, which was up 0.1%. Top gainers within the Telecommunications industry included Voltari ( VLTC), up 4.8%, Iteris ( ITI), up 2.9%, Alteva ( ALTV), up 1.7%, Elephant Talk Communications ( ETAK), up 3.4% and On Track Innovations ( OTIV), up 1.8%.

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

Elephant Talk Communications ( ETAK) is one of the companies that pushed the Telecommunications industry higher today. Elephant Talk Communications was up $0.03 (3.4%) to $0.88 on light volume. Throughout the day, 20,469 shares of Elephant Talk Communications exchanged hands as compared to its average daily volume of 254,100 shares. The stock ranged in a price between $0.85-$0.88 after having opened the day at $0.86 as compared to the previous trading day's close of $0.85.

Elephant talk Communications Corporation operates as mobile software defined network architecture vendor in Europe, the Middle East, Africa, and the Americas. Elephant Talk Communications has a market cap of $132.0 million and is part of the technology sector. Shares are down 30.9% year-to-date as of the close of trading on Wednesday. Currently there is 1 analyst who rates Elephant Talk Communications a buy, no analysts rate it a sell, and none rate it a hold.

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TheStreet Ratings rates Elephant Talk Communications as a sell. The area that we feel has been the company's primary weakness has been its declining revenues.

Highlights from TheStreet Ratings analysis on ETAK go as follows:

  • 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 Diversified Telecommunication Services industry and the overall market, ELEPHANT TALK COMM INC's return on equity significantly trails that of both the industry average and the S&P 500.
  • ETAK, with its decline in revenue, slightly underperformed the industry average of 3.5%. Since the same quarter one year prior, revenues slightly dropped by 1.8%. The declining revenue has not hurt the company's bottom line, with increasing earnings per share.
  • The current debt-to-equity ratio, 0.43, is low and is below the industry average, implying that there has been successful management of debt levels. Although the company had a strong debt-to-equity ratio, its quick ratio of 0.87 is somewhat weak and could be cause for future problems.
  • Compared to where it was 12 months ago, the stock is up, but it has so far lagged the appreciation in the S&P 500. Turning our attention to the future direction of the stock, we do not believe this stock offers ample reward opportunity to compensate for the risks, despite the fact that it rose over the past year.
  • The net income growth from the same quarter one year ago has exceeded that of the S&P 500, but is less than that of the Diversified Telecommunication Services industry average. The net income increased by 19.7% when compared to the same quarter one year prior, going from -$5.14 million to -$4.13 million.

You can view the full analysis from the report here: Elephant Talk Communications 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, Alteva ( ALTV) was up $0.11 (1.7%) to $6.57 on light volume. Throughout the day, 13,030 shares of Alteva exchanged hands as compared to its average daily volume of 26,100 shares. The stock ranged in a price between $6.48-$6.58 after having opened the day at $6.48 as compared to the previous trading day's close of $6.46.

Alteva, Inc., a cloud-based communications company, provides unified communication solutions for organizations. The company operates in two segments, Unified Communications and Telephone. Alteva has a market cap of $41.1 million and is part of the technology sector. Shares are down 20.9% year-to-date as of the close of trading on Wednesday. Currently there is 1 analyst who rates Alteva 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 Alteva as a sell. The company's weaknesses can be seen in multiple areas, such as its weak operating cash flow and generally disappointing historical performance in the stock itself.

Highlights from TheStreet Ratings analysis on ALTV go as follows:

  • Net operating cash flow has significantly decreased to -$1.59 million or 384.64% when compared to the same quarter last year. In addition, when comparing to the industry average, the firm's growth rate is much lower.
  • ALTV'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 28.71%, 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 Diversified Telecommunication Services industry and the overall market, ALTEVA's return on equity significantly trails that of both the industry average and the S&P 500.
  • ALTEVA 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 two years. However, we anticipate underperformance relative to this pattern in the coming year. During the past fiscal year, ALTEVA continued to lose money by earning -$0.11 versus -$1.67 in the prior year. For the next year, the market is expecting a contraction of 245.4% in earnings (-$0.38 versus -$0.11).
  • ALTV, with its decline in revenue, slightly underperformed the industry average of 3.5%. Since the same quarter one year prior, revenues slightly dropped by 2.8%. The declining revenue has not hurt the company's bottom line, with increasing earnings per share.

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

Iteris ( ITI) was another company that pushed the Telecommunications industry higher today. Iteris was up $0.05 (2.9%) to $1.75 on average volume. Throughout the day, 74,702 shares of Iteris exchanged hands as compared to its average daily volume of 52,400 shares. The stock ranged in a price between $1.71-$1.78 after having opened the day at $1.72 as compared to the previous trading day's close of $1.70.

Iteris, Inc. provides intelligent transportation systems solutions to the traffic management market worldwide. Iteris has a market cap of $54.1 million and is part of the technology sector. Shares are down 19.1% year-to-date as of the close of trading on Wednesday. Currently there are no analysts who rate Iteris a buy, no analysts rate it a sell, and none rate it a hold.

TheStreet Ratings rates Iteris 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, deteriorating net income and weak operating cash flow.

Highlights from TheStreet Ratings analysis on ITI go as follows:

  • ITI's revenue growth has slightly outpaced the industry average of 9.4%. Since the same quarter one year prior, revenues rose by 18.3%. This growth in revenue appears to have trickled down to the company's bottom line, improving the earnings per share.
  • ITI 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 2.72, which clearly demonstrates the ability to cover short-term cash needs.
  • ITERIS INC reported significant earnings per share improvement in the most recent quarter compared to the same quarter a year ago. Stable earnings per share over the past year indicate the company has sound management over its earnings and share float. However, the consensus estimates suggest that there will be an upward trend in the coming year. During the past fiscal year, ITERIS INC's EPS of $0.03 remained unchanged from the prior years' EPS of $0.03. This year, the market expects an improvement in earnings ($0.06 versus $0.03).
  • Net operating cash flow has decreased to -$0.84 million or 23.88% when compared to the same quarter last year. In addition, when comparing to the industry average, the firm's growth rate is much lower.
  • ITI has underperformed the S&P 500 Index, declining 17.24% from its price level of one year ago. Looking ahead, we do not see anything in this company's numbers that would change the one-year trend. It was down over the last twelve months; and it could be down again in the next twelve. Naturally, a bull or bear market could sway the movement of this stock.

You can view the full analysis from the report here: Iteris 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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