3 Telecommunications Stocks Pushing The 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.

All three major indices traded up today with the Dow Jones Industrial Average ( ^DJI) trading up 30 points (0.2%) at 17,107 as of Tuesday, Aug. 26, 2014, 4:20 PM ET. The NYSE advances/declines ratio sits at 2,006 issues advancing vs. 1,020 declining with 179 unchanged.

The Telecommunications industry as a whole closed the day up 1.0% versus the S&P 500, which was up 0.1%. Top gainers within the Telecommunications industry included Internet Gold Golden Lines ( IGLD), up 2.2%, B Communications ( BCOM), up 4.9%, Gilat Satellite Networks ( GILT), up 3.9%, Blonder Tongue Laboratories ( BDR), up 5.8% and Iteris ( ITI), up 8.0%.

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

Gilat Satellite Networks ( GILT) is one of the companies that pushed the Telecommunications industry higher today. Gilat Satellite Networks was up $0.18 (3.9%) to $4.76 on light volume. Throughout the day, 13,250 shares of Gilat Satellite Networks exchanged hands as compared to its average daily volume of 20,300 shares. The stock ranged in a price between $4.69-$4.77 after having opened the day at $4.71 as compared to the previous trading day's close of $4.58.

Gilat Satellite Networks Ltd. and its subsidiaries provide Internet protocol (IP) based digital satellite communication and networking products and services worldwide. It designs, produces, and markets very small aperture terminals (VSATs) and related VSAT network equipment. Gilat Satellite Networks has a market cap of $200.3 million and is part of the technology sector. Shares are up 1.4% year-to-date as of the close of trading on Monday. Currently there are no analysts who rate Gilat Satellite Networks a buy, no analysts rate it a sell, and none rate it a hold.

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TheStreet Ratings rates Gilat Satellite Networks 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 GILT go as follows:

  • Net operating cash flow has significantly decreased to -$7.78 million or 1376.47% when compared to the same quarter last year. In addition, when comparing to the industry average, the firm's growth rate is much lower.
  • GILT has underperformed the S&P 500 Index, declining 8.21% from its price level of one year ago. The fact that the stock is now selling for less than others in its industry in relation to its current earnings is not reason enough to justify a buy rating at this time.
  • Current return on equity exceeded its ROE from the same quarter one year prior. This is a clear sign of strength within the company. Compared to other companies in the Communications Equipment industry and the overall market, GILAT SATELLITE NETWORKS LTD's return on equity significantly trails that of both the industry average and the S&P 500.
  • GILT, with its decline in revenue, underperformed when compared the industry average of 3.2%. Since the same quarter one year prior, revenues fell by 32.6%. The declining revenue has not hurt the company's bottom line, with increasing earnings per share.
  • GILAT SATELLITE NETWORKS 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, GILAT SATELLITE NETWORKS LTD continued to lose money by earning -$0.23 versus -$0.55 in the prior year.

You can view the full analysis from the report here: Gilat Satellite Networks Ratings Report

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At the close, B Communications ( BCOM) was up $0.87 (4.9%) to $18.75 on light volume. Throughout the day, 1,351 shares of B Communications exchanged hands as compared to its average daily volume of 2,600 shares. The stock ranged in a price between $18.67-$18.80 after having opened the day at $18.67 as compared to the previous trading day's close of $17.88.

B Communications Ltd. provides various communications services in Israel. B Communications has a market cap of $550.0 million and is part of the technology sector. Shares are up 5.1% year-to-date as of the close of trading on Monday. Currently there are no analysts who rate B Communications 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 B Communications as a hold. The company's strengths can be seen in multiple areas, such as its revenue growth, solid stock price performance and expanding profit margins. However, as a counter to these strengths, we also find weaknesses including deteriorating net income, generally higher debt management risk and disappointing return on equity.

Highlights from TheStreet Ratings analysis on BCOM go as follows:

  • BCOM's revenue growth has slightly outpaced the industry average of 1.1%. Since the same quarter one year prior, revenues slightly increased by 0.1%. This growth in revenue does not appear to have trickled down to the company's bottom line, displayed by a decline in earnings per share.
  • Compared to its closing price of one year ago, BCOM's share price has jumped by 34.86%, exceeding the performance of the broader market during that same time frame. Regarding the stock's future course, our hold rating indicates that we do not recommend additional investment in this stock despite its gains in the past year.
  • 42.97% is the gross profit margin for B COMMUNICATIONS 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 -8.78% is in-line with the industry average.
  • The debt-to-equity ratio is very high at 16.58 and currently higher than the industry average, implying increased risk associated with the management of debt levels within the company. Along with the unfavorable debt-to-equity ratio, BCOM maintains a poor quick ratio of 0.92, which illustrates the inability to avoid short-term cash problems.
  • 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, B COMMUNICATIONS LTD's return on equity significantly trails that of both the industry average and the S&P 500.

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

Internet Gold Golden Lines ( IGLD) was another company that pushed the Telecommunications industry higher today. Internet Gold Golden Lines was up $0.20 (2.2%) to $9.25 on average volume. Throughout the day, 3,210 shares of Internet Gold Golden Lines exchanged hands as compared to its average daily volume of 3,800 shares. The stock ranged in a price between $9.00-$9.26 after having opened the day at $9.23 as compared to the previous trading day's close of $9.05.

Internet Gold Golden Lines has a market cap of $173.4 million and is part of the technology sector. Shares are up 5.7% year-to-date as of the close of trading on Monday.

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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