3 Stocks Moving The Telecommunications Industry Upward

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.

All three major indices traded up today with the Dow Jones Industrial Average ( ^DJI) trading up 81 points (0.5%) at 16,920 as of Tuesday, Aug. 19, 2014, 4:20 PM ET. The NYSE advances/declines ratio sits at 1,954 issues advancing vs. 1,082 declining with 162 unchanged.

The Telecommunications industry as a whole closed the day up 0.2% versus the S&P 500, which was up 0.5%. Top gainers within the Telecommunications industry included Voltari ( VLTC), up 4.9%, Blonder Tongue Laboratories ( BDR), up 14.6%, RELM Wireless ( RWC), up 1.6%, Iteris ( ITI), up 4.5% and Novatel Wireless ( NVTL), up 1.5%.

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

Novatel Wireless ( NVTL) is one of the companies that pushed the Telecommunications industry higher today. Novatel Wireless was up $0.03 (1.5%) to $2.00 on average volume. Throughout the day, 167,223 shares of Novatel Wireless exchanged hands as compared to its average daily volume of 148,800 shares. The stock ranged in a price between $1.94-$2.00 after having opened the day at $1.99 as compared to the previous trading day's close of $1.97.

Novatel Wireless, Inc. provides wireless broadband access solutions for the mobile communications market worldwide. It operates in the Mobile Computing Products, and M2M Products and Solutions segments. Novatel Wireless has a market cap of $72.6 million and is part of the technology sector. Shares are down 16.9% year-to-date as of the close of trading on Monday. Currently there is 1 analyst who rates Novatel Wireless a buy, 1 analyst rates 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 Novatel Wireless as a sell. The company's weaknesses can be seen in multiple areas, such as its unimpressive growth in net income, disappointing return on equity, poor profit margins, weak operating cash flow and generally disappointing historical performance in the stock itself.

Highlights from TheStreet Ratings analysis on NVTL go as follows:

  • 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 Communications Equipment industry. The net income has significantly decreased by 120.7% when compared to the same quarter one year ago, falling from -$7.89 million to -$17.42 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 Communications Equipment industry and the overall market, NOVATEL WIRELESS INC's return on equity significantly trails that of both the industry average and the S&P 500.
  • The gross profit margin for NOVATEL WIRELESS INC is rather low; currently it is at 15.46%. It has decreased from the same quarter the previous year. Along with this, the net profit margin of -46.72% is significantly below that of the industry average.
  • Net operating cash flow has significantly decreased to -$4.36 million or 194.36% when compared to the same quarter last year. In addition, when comparing to the industry average, the firm's growth rate is much lower.
  • Despite any intermediate fluctuations, we have only bad news to report on this stock's performance over the last year: it has tumbled by 43.70%, worse than the S&P 500's performance. Consistent with the plunge in the stock price, the company's earnings per share are down 121.73% 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.

You can view the full analysis from the report here: Novatel Wireless 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, Iteris ( ITI) was up $0.07 (4.5%) to $1.64 on light volume. Throughout the day, 45,543 shares of Iteris exchanged hands as compared to its average daily volume of 70,200 shares. The stock ranged in a price between $1.56-$1.65 after having opened the day at $1.56 as compared to the previous trading day's close of $1.57.

Iteris, Inc. provides intelligent transportation systems solutions to the traffic management market worldwide. Iteris has a market cap of $52.1 million and is part of the technology sector. Shares are down 25.2% year-to-date as of the close of trading on Monday. Currently there are no analysts who rate Iteris 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 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 8.8%. 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 the cash generation rate to the industry average, the firm's growth is significantly lower.
  • ITI has underperformed the S&P 500 Index, declining 11.54% 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.

RELM Wireless ( RWC) was another company that pushed the Telecommunications industry higher today. RELM Wireless was up $0.07 (1.6%) to $4.36 on heavy volume. Throughout the day, 38,238 shares of RELM Wireless exchanged hands as compared to its average daily volume of 24,900 shares. The stock ranged in a price between $4.22-$4.39 after having opened the day at $4.29 as compared to the previous trading day's close of $4.29.

RELM Wireless Corporation designs, manufactures, and markets wireless communications products under the BK Radio and RELM brand names in the United States and internationally. Its products include two-way land mobile radios, repeaters, base stations, and related components and subsystems. RELM Wireless has a market cap of $57.1 million and is part of the technology sector. Shares are up 27.3% year-to-date as of the close of trading on Monday. Currently there are no analysts who rate RELM Wireless a buy, no analysts rate it a sell, and none rate it a hold.

TheStreet Ratings rates RELM Wireless as a buy. 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, good cash flow from operations, solid stock price performance and increase in net income. We feel these strengths outweigh the fact that the company has had somewhat disappointing return on equity.

Highlights from TheStreet Ratings analysis on RWC go as follows:

  • The revenue growth came in higher than the industry average of 3.1%. Since the same quarter one year prior, revenues rose by 10.6%. This growth in revenue does not appear to have trickled down to the company's bottom line, displaying stagnant earnings per share.
  • RWC 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 4.13, which clearly demonstrates the ability to cover short-term cash needs.
  • Net operating cash flow has significantly increased by 107.29% to $0.14 million when compared to the same quarter last year. In addition, RELM WIRELESS CORP has also vastly surpassed the industry average cash flow growth rate of 5.10%.
  • 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 Communications Equipment industry average. The net income increased by 17.3% when compared to the same quarter one year prior, going from $0.41 million to $0.48 million.
  • Compared to its closing price of one year ago, RWC's share price has jumped by 44.09%, exceeding the performance of the broader market during that same time frame. Looking ahead, the stock's sharp 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 other strengths this company displays justify these higher price levels.

You can view the full analysis from the report here: RELM Wireless 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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