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The Telecommunications industry as a whole closed the day down 1.3% versus the S&P 500, which was down 1.5%. Laggards within the Telecommunications industry included RRSat Global Communications Network ( RRST), down 2.6%, Technical Communications ( TCCO), down 4.6%, China TechFaith Wireless Comm Tech ( CNTF), down 1.5%, Communications Systems ( JCS), down 2.5% and I D Systems ( IDSY), down 2.8%.

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

Communications Systems ( JCS) is one of the companies that pushed the Telecommunications industry lower today. Communications Systems was down $0.28 (2.5%) to $10.75 on light volume. Throughout the day, 4,796 shares of Communications Systems exchanged hands as compared to its average daily volume of 12,400 shares. The stock ranged in price between $10.52-$10.91 after having opened the day at $10.87 as compared to the previous trading day's close of $11.03.

Communications Systems, Inc., together with its subsidiaries, manufactures and sells modular connecting and wiring devices, digital subscriber line filters, structured wiring systems, and media and rate conversion products primarily in North America, Europe, the Middle East, and Africa. Communications Systems has a market cap of $97.1 million and is part of the technology sector. Shares are down 1.0% year-to-date as of the close of trading on Monday.

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TheStreet Ratings rates Communications Systems 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 good cash flow from operations. However, as a counter to these strengths, we also find weaknesses including feeble growth in the company's earnings per share, deteriorating net income and disappointing return on equity.

Highlights from TheStreet Ratings analysis on JCS go as follows:

  • JCS's revenue growth has slightly outpaced the industry average of 4.3%. Since the same quarter one year prior, revenues slightly increased by 4.0%. 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.
  • JCS's debt-to-equity ratio is very low at 0.01 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 2.77, which clearly demonstrates the ability to cover short-term cash needs.
  • 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. Looking ahead, our view is that this company's fundamentals will not have much impact in either direction, allowing the stock to generally move up or down based on the push and pull of the broad market.
  • The company, on the basis of change in net income from the same quarter one year ago, has underperformed when compared to that of the S&P 500 and greatly underperformed compared to the Communications Equipment industry average. The net income has decreased by 12.3% when compared to the same quarter one year ago, dropping from $1.64 million to $1.44 million.
  • Current return on equity is lower than its ROE from the same quarter one year prior. This is a clear sign of weakness within the company. Compared to other companies in the Communications Equipment industry and the overall market, COMMUNICATIONS SYSTEMS INC'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: Communications Systems Ratings Report

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At the close, China TechFaith Wireless Comm Tech ( CNTF) was down $0.02 (1.5%) to $1.28 on light volume. Throughout the day, 39,104 shares of China TechFaith Wireless Comm Tech exchanged hands as compared to its average daily volume of 75,200 shares. The stock ranged in price between $1.26-$1.32 after having opened the day at $1.30 as compared to the previous trading day's close of $1.30.

China Techfaith Wireless Communication Technology Limited is engaged in the original design, development, and sale of mobile handsets in the People's Republic of China and internationally. China TechFaith Wireless Comm Tech has a market cap of $69.3 million and is part of the technology sector. Shares are down 21.6% year-to-date as of the close of trading on Monday.

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TheStreet Ratings rates China TechFaith Wireless Comm Tech as a sell. The company's weaknesses can be seen in multiple areas, such as its deteriorating net income, disappointing return on equity, poor profit margins and generally disappointing historical performance in the stock itself.

Highlights from TheStreet Ratings analysis on CNTF 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 Computers & Peripherals industry. The net income has significantly decreased by 114.9% when compared to the same quarter one year ago, falling from -$0.97 million to -$2.09 million.
  • The company's current return on equity has slightly decreased from the same quarter one year prior. This implies a minor weakness in the organization. Compared to other companies in the Computers & Peripherals industry and the overall market, CHINA TECHFAITH WIRELESS-ADR's return on equity significantly trails that of both the industry average and the S&P 500.
  • The gross profit margin for CHINA TECHFAITH WIRELESS-ADR is currently extremely low, coming in at 11.43%. It has decreased from the same quarter the previous year. Along with this, the net profit margin of -8.76% is significantly below that of the industry average.
  • The share price of CHINA TECHFAITH WIRELESS-ADR has not done very well: it is down 9.73% and has underperformed the S&P 500, in part reflecting the company's sharply declining earnings per share when compared to the year-earlier quarter. 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.
  • CHINA TECHFAITH WIRELESS-ADR 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. Stable Earnings per share over the past year indicate the company has sound management over its earnings and share float. During the past fiscal year, CHINA TECHFAITH WIRELESS-ADR continued to lose money by earning -$0.05 versus -$0.06 in the prior year.

You can view the full analysis from the report here: China TechFaith Wireless Comm Tech Ratings Report

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RRSat Global Communications Network ( RRST) was another company that pushed the Telecommunications industry lower today. RRSat Global Communications Network was down $0.17 (2.6%) to $6.25 on heavy volume. Throughout the day, 32,370 shares of RRSat Global Communications Network exchanged hands as compared to its average daily volume of 7,800 shares. The stock ranged in price between $6.22-$6.48 after having opened the day at $6.40 as compared to the previous trading day's close of $6.42.

RRsat Global Communications Network Ltd. provides digital media management and distribution services for broadcasters and content owners in North America, Europe, Asia, Israel, the Middle East, and internationally. RRSat Global Communications Network has a market cap of $112.8 million and is part of the technology sector. Shares are down 23.6% year-to-date as of the close of trading on Monday. Currently there is 1 analyst who rates RRSat Global Communications Network a buy, no analysts rate it a sell, and 1 rates it a hold.

TheStreet Ratings rates RRSat Global Communications Network as a buy. The company's strengths can be seen in multiple areas, such as its revenue growth and largely solid financial position with reasonable debt levels by most measures. We feel these strengths outweigh the fact that the company has had lackluster performance in the stock itself.

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Highlights from TheStreet Ratings analysis on RRST go as follows:

  • RRST's revenue growth has slightly outpaced the industry average of 9.1%. Since the same quarter one year prior, revenues rose by 10.2%. 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.
  • RRST 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. To add to this, RRST has a quick ratio of 1.68, which demonstrates the ability of the company to cover short-term liquidity needs.
  • The company's current return on equity has slightly decreased from the same quarter one year prior. This implies a minor weakness in the organization. When compared to other companies in the Media industry and the overall market, RRSAT GLOBAL COMM NTWRK LTD's return on equity is below that of both the industry average and the S&P 500.
  • The gross profit margin for RRSAT GLOBAL COMM NTWRK LTD is currently lower than what is desirable, coming in at 28.90%. It has decreased from the same quarter the previous year. Along with this, the net profit margin of 2.07% significantly trails the industry average.
  • Net operating cash flow has significantly decreased to $2.23 million or 73.37% when compared to the same quarter last year. In addition, when comparing to the industry average, the firm's growth rate is much lower.

You can view the full analysis from the report here: RRSat Global Communications Network Ratings Report

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