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 2.0% versus the S&P 500, which was down 1.8%. Laggards within the Telecommunications industry included Blonder Tongue Laboratories ( BDR), down 2.2%, Maxcom Telecomunicaciones SAB de CV ( MXT), down 4.0%, Internet Gold Golden Lines ( IGLD), down 7.3%, RIT Technologies ( RITT), down 5.9% and Technical Communications ( TCCO), down 3.0%.

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

RIT Technologies ( RITT) is one of the companies that pushed the Telecommunications industry lower today. RIT Technologies was down $0.08 (5.9%) to $1.27 on light volume. Throughout the day, 17,543 shares of RIT Technologies exchanged hands as compared to its average daily volume of 31,400 shares. The stock ranged in price between $1.27-$1.32 after having opened the day at $1.32 as compared to the previous trading day's close of $1.35.

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 $17.1 million and is part of the technology sector. Shares are down 23.3% year-to-date as of the close of trading on Wednesday.

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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 54.40%, 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

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At the close, Internet Gold Golden Lines ( IGLD) was down $0.77 (7.3%) to $9.73 on average volume. Throughout the day, 4,285 shares of Internet Gold Golden Lines exchanged hands as compared to its average daily volume of 3,700 shares. The stock ranged in price between $9.73-$9.93 after having opened the day at $9.93 as compared to the previous trading day's close of $10.50.

Internet Gold Golden Lines has a market cap of $189.3 million and is part of the technology sector. Shares are up 22.6% year-to-date as of the close of trading on Wednesday.

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Highlights from TheStreet Ratings analysis on IGLD go as follows:

You can view the full analysis from the report here: Internet Gold Golden Lines 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 lower today. Maxcom Telecomunicaciones SAB de CV was down $0.06 (4.0%) to $1.50 on light volume. Throughout the day, 560 shares of Maxcom Telecomunicaciones SAB de CV exchanged hands as compared to its average daily volume of 7,500 shares. The stock ranged in price between $1.50-$1.52 after having opened the day at $1.50 as compared to the previous trading day's close of $1.56.

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 $232.9 million and is part of the technology sector. Shares are down 4.3% year-to-date as of the close of trading on Wednesday. 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 feeble growth in its earnings per share, deteriorating net income, disappointing return on equity and generally disappointing historical performance in the stock itself.

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Highlights from TheStreet Ratings analysis on MXT go as follows:

  • MAXCOM TELECOMUNICACIONES SA 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 reported a trend of declining earnings per share over the past two years. During the past fiscal year, MAXCOM TELECOMUNICACIONES SA reported poor results of -$0.57 versus -$0.11 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 Diversified Telecommunication Services industry. The net income has significantly decreased by 134.3% when compared to the same quarter one year ago, falling from $4.19 million to -$1.44 million.
  • Return on equity has greatly decreased when compared to its ROE from the same quarter one year prior. This is a signal of major weakness within the corporation. 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.
  • Despite any intermediate fluctuations, we have only bad news to report on this stock's performance over the last year: it has tumbled by 38.12%, worse than the S&P 500's performance. Consistent with the plunge in the stock price, the company's earnings per share are down 133.33% compared to the year-earlier 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.
  • 49.71% is the gross profit margin for MAXCOM TELECOMUNICACIONES SA which we consider to be strong. Despite the high profit margin, it has decreased significantly from the same period last year. Despite the mixed results of the gross profit margin, MXT's net profit margin of -2.88% significantly underperformed when compared to the industry average.

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.

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