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 up 0.5% versus the S&P 500, which was down 0.6%. Laggards within the Telecommunications industry included Otelco ( OTEL), down 1.6%, Voltari ( VLTC), down 4.6%, Hong Kong Television Network ( HKTV), down 3.7%, Envivio ( ENVI), down 2.4% and I D Systems ( IDSY), down 2.8%.

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

Turkcell Iletisim Hizmetleri AS ( TKC) is one of the companies that pushed the Telecommunications industry lower today. Turkcell Iletisim Hizmetleri AS was down $0.49 (3.4%) to $13.90 on average volume. Throughout the day, 291,954 shares of Turkcell Iletisim Hizmetleri AS exchanged hands as compared to its average daily volume of 306,800 shares. The stock ranged in price between $13.89-$14.23 after having opened the day at $14.21 as compared to the previous trading day's close of $14.39.

Turkcell Iletisim Hizmetleri AS establishes and operates a Global System for Mobile Communications (GSM) network in Turkey and regional states. It operates through three segments: Turkcell, Euroasia, and Belarusian Telecom. Turkcell Iletisim Hizmetleri AS has a market cap of $12.8 billion and is part of the technology sector. Shares are up 7.8% year-to-date as of the close of trading on Thursday. Currently there are 2 analysts who rate Turkcell Iletisim Hizmetleri AS a buy, no analysts rate it a sell, and 1 rates it a hold.

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TheStreet Ratings rates Turkcell Iletisim Hizmetleri AS as a buy. The company's strengths can be seen in multiple areas, such as its largely solid financial position with reasonable debt levels by most measures, expanding profit margins and increase in stock price during the past year. We feel these strengths outweigh the fact that the company has had sub par growth in net income.

Highlights from TheStreet Ratings analysis on TKC go as follows:

  • TKC's debt-to-equity ratio is very low at 0.22 and is currently below that of the industry average, implying that there has been very successful management of debt levels. Along with this, the company maintains a quick ratio of 2.56, which clearly demonstrates the ability to cover short-term cash needs.
  • The gross profit margin for TURKCELL ILETISIM HIZMET is rather high; currently it is at 52.39%. It has increased from the same quarter the previous year. Despite the strong results of the gross profit margin, TKC's net profit margin of 16.67% significantly trails the industry average.
  • 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, it goes without saying that even the best stocks can fall in an overall down market. However, in any other environment, this stock still has good upside potential despite the fact that it has already risen in the past year.
  • The revenue fell significantly faster than the industry average of 55.6%. Since the same quarter one year prior, revenues fell by 10.1%. The declining revenue appears to have seeped down to the company's bottom line, decreasing earnings per share.
  • TURKCELL ILETISIM HIZMET's earnings per share declined by 22.9% in the most recent quarter compared to the same quarter a year ago. This company has reported somewhat volatile earnings recently. We feel it is likely to report a decline in earnings in the coming year. During the past fiscal year, TURKCELL ILETISIM HIZMET increased its bottom line by earning $1.40 versus $1.32 in the prior year. For the next year, the market is expecting a contraction of 15.0% in earnings ($1.19 versus $1.40).

You can view the full analysis from the report here: Turkcell Iletisim Hizmetleri AS Ratings Report

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At the close, I D Systems ( IDSY) was down $0.16 (2.8%) to $5.47 on light volume. Throughout the day, 15,107 shares of I D Systems exchanged hands as compared to its average daily volume of 22,300 shares. The stock ranged in price between $5.31-$5.60 after having opened the day at $5.60 as compared to the previous trading day's close of $5.63.

I.D. Systems, Inc. develops, markets, and sells wireless solutions for managing and securing industrial vehicles, transportation assets, and rental vehicles. I D Systems has a market cap of $67.8 million and is part of the technology sector. Shares are down 2.8% year-to-date as of the close of trading on Thursday. Currently there are 3 analysts who rate I D Systems a buy, no analysts rate it a sell, and none rate it a hold.

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TheStreet Ratings rates I D Systems as a sell. The company's weaknesses can be seen in multiple areas, such as its disappointing return on equity and generally disappointing historical performance in the stock itself.

Highlights from TheStreet Ratings analysis on IDSY go as follows:

  • 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 Electronic Equipment, Instruments & Components industry and the overall market, I D SYSTEMS INC's return on equity significantly trails that of both the industry average and the S&P 500.
  • IDSY has underperformed the S&P 500 Index, declining 13.44% 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.
  • I D SYSTEMS INC reported flat earnings per share in the most recent quarter. The company has reported a trend of declining earnings per share over the past year. However, the consensus estimate suggests that this trend should reverse in the coming year. During the past fiscal year, I D SYSTEMS INC reported poor results of -$0.63 versus -$0.23 in the prior year. This year, the market expects an improvement in earnings (-$0.30 versus -$0.63).
  • 49.83% is the gross profit margin for I D SYSTEMS INC which we consider to be strong. Regardless of IDSY's high profit margin, it has managed to decrease from the same period last year. Despite the mixed results of the gross profit margin, IDSY's net profit margin of -14.93% significantly underperformed when compared to the industry average.
  • The net income growth from the same quarter one year ago has exceeded that of the Electronic Equipment, Instruments & Components industry average, but is less than that of the S&P 500. The net income increased by 0.1% when compared to the same quarter one year prior, going from -$1.71 million to -$1.71 million.

You can view the full analysis from the report here: I D Systems Ratings Report

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Envivio ( ENVI) was another company that pushed the Telecommunications industry lower today. Envivio was down $0.05 (2.4%) to $2.01 on light volume. Throughout the day, 32,582 shares of Envivio exchanged hands as compared to its average daily volume of 58,900 shares. The stock ranged in price between $1.97-$2.05 after having opened the day at $2.05 as compared to the previous trading day's close of $2.06.

Envivio, Inc. provides software-based IP video processing and distribution solutions that enable the delivery of high-quality video to consumers. Envivio has a market cap of $54.7 million and is part of the technology sector. Shares are down 39.4% year-to-date as of the close of trading on Thursday. Currently there are no analysts who rate Envivio a buy, no analysts rate it a sell, and 1 rates it a hold.

TheStreet Ratings rates Envivio as a sell. The company's weaknesses can be seen in multiple areas, such as its unimpressive growth in net income and generally disappointing historical performance in the stock itself.

STOCKS TO BUY: TheStreet Quant Ratings has identified a handful of stocks that can potentially TRIPLE in the next 12 months. Learn more.

Highlights from TheStreet Ratings analysis on ENVI 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 Software industry. The net income has significantly decreased by 64.8% when compared to the same quarter one year ago, falling from -$2.48 million to -$4.09 million.
  • Despite any intermediate fluctuations, we have only bad news to report on this stock's performance over the last year: it has tumbled by 31.79%, worse than the S&P 500's performance. Consistent with the plunge in the stock price, the company's earnings per share are down 66.66% 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.
  • The return on equity has improved slightly when compared to the same quarter one year prior. This can be construed as a modest strength in the organization. Compared to other companies in the Software industry and the overall market, ENVIVIO INC's return on equity significantly trails that of both the industry average and the S&P 500.
  • The gross profit margin for ENVIVIO INC is rather high; currently it is at 58.24%. Despite the high profit margin, it has decreased significantly from the same period last year. Despite the mixed results of the gross profit margin, ENVI's net profit margin of -35.67% significantly underperformed when compared to the industry average.
  • ENVI, with its decline in revenue, underperformed when compared the industry average of 11.6%. Since the same quarter one year prior, revenues slightly dropped by 0.8%. The declining revenue appears to have seeped down to the company's bottom line, decreasing earnings per share.

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