NEW YORK (TheStreet) -- Shares of Sonus Networks (SONS) were gaining 5.5% to $3.66 Monday after disclosing that president and CEO Raymond Dolan purchased 1 million shares of the communication equipment company.
Dolan purchased 1 million shares of common stock of Sonus Networks on Oct. 31 for $3.43 a share. The purchase brought Dolan's total number of shares in the company to 4,578,574, according to the filing.
The insider purchase came a week after Sonus reported its third-quarter results in which the company reported earnings of 1 cent a share and revenue of $73.22 million. The results meet analysts' earnings estimates and beat revenue estimates of $71.97 million.
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TheStreet Ratings team rates SONUS NETWORKS INC as a Hold with a ratings score of C. TheStreet Ratings Team has this to say about their recommendation:
"We rate SONUS NETWORKS INC (SONS) a HOLD. The primary factors that have impacted our rating are mixed -- some indicating strength, some showing weaknesses, with little evidence to justify the expectation of either a positive or negative performance for this stock relative to most other stocks. The company's strengths can be seen in multiple areas, such as its revenue growth, good cash flow from operations and expanding profit margins. However, as a counter to these strengths, we find that the growth in the company's net income has been quite unimpressive."
Highlights from the analysis by TheStreet Ratings Team goes as follows:
- The revenue growth came in higher than the industry average of 3.0%. Since the same quarter one year prior, revenues slightly increased by 7.5%. 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.
- Net operating cash flow has significantly increased by 387.72% to $7.83 million when compared to the same quarter last year. In addition, SONUS NETWORKS INC has also vastly surpassed the industry average cash flow growth rate of 7.14%.
- Compared to where it was a year ago today, the stock is now trading at a higher level, regardless of the company's weak earnings results. Despite the fact that it has already risen in the past year, there is currently no conclusive evidence that warrants the purchase or sale of this stock.
- 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, SONUS NETWORKS INC's return on equity significantly trails that of both the industry average and the S&P 500.
- 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 38.2% when compared to the same quarter one year ago, falling from -$3.77 million to -$5.21 million.
- You can view the full analysis from the report here: SONS Ratings Report