3 Stocks Driving The Telecommunications 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 191 points (1.1%) at 17,512 as of Friday, Jan. 16, 2015, 4:20 PM ET. The NYSE advances/declines ratio sits at 2,533 issues advancing vs. 578 declining with 102 unchanged.

The Telecommunications industry as a whole closed the day up 1.4% versus the S&P 500, which was up 1.3%. Top gainers within the Telecommunications industry included Glowpoint ( GLOW), up 2.0%, Voltari ( VLTC), up 43.6%, RRSat Global Communications Network ( RRST), up 4.9%, Iteris ( ITI), up 2.4% and China TechFaith Wireless Comm Tech ( CNTF), up 2.9%.

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

Iteris ( ITI) is one of the companies that pushed the Telecommunications industry higher today. Iteris was up $0.04 (2.4%) to $1.70 on light volume. Throughout the day, 3,000 shares of Iteris exchanged hands as compared to its average daily volume of 35,100 shares. The stock ranged in a price between $1.68-$1.70 after having opened the day at $1.68 as compared to the previous trading day's close of $1.66.

Iteris, Inc. provides intelligent information solutions to the traffic management market worldwide. The company's Roadway Sensors segment offers a range of vehicle detection systems for traffic intersection control, incident detection, and highway traffic data collection applications. Iteris has a market cap of $55.0 million and is part of the technology sector. Shares are down 3.2% year-to-date as of the close of trading on Thursday. Currently there are no analysts who rate Iteris a buy, no analysts rate it a sell, and none rate it a hold.

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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 deteriorating net income, disappointing return on equity 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 1.2%. Since the same quarter one year prior, revenues slightly increased by 8.9%. 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.
  • 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 2.66, which clearly demonstrates the ability to cover short-term cash needs.
  • Compared to its price level of one year ago, ITI is down 14.08% to its most recent closing price of 1.71. Looking ahead, our view is that this company's fundamentals will not have much impact either way, allowing the stock to generally move up or down based on the push and pull of the broad market.
  • 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 Electronic Equipment, Instruments & Components industry and the overall market, ITERIS INC's return on equity significantly trails that of both the industry average and the S&P 500.
  • Net operating cash flow has significantly decreased to $1.31 million or 59.51% 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: Iteris Ratings Report

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At the close, RRSat Global Communications Network ( RRST) was up $0.33 (4.9%) to $7.10 on light volume. Throughout the day, 5,250 shares of RRSat Global Communications Network exchanged hands as compared to its average daily volume of 7,400 shares. The stock ranged in a price between $6.80-$7.10 after having opened the day at $6.82 as compared to the previous trading day's close of $6.77.

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 $119.9 million and is part of the technology sector. Shares are down 6.0% year-to-date as of the close of trading on Thursday. 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.

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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, largely solid financial position with reasonable debt levels by most measures, reasonable valuation levels, good cash flow from operations 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 RRST go as follows:

  • Despite its growing revenue, the company underperformed as compared with the industry average of 8.5%. Since the same quarter one year prior, revenues slightly increased by 8.2%. This growth in revenue appears to have trickled down to the company's bottom line, improving the 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 1.72, which demonstrates the ability of the company to cover short-term liquidity needs.
  • Net operating cash flow has increased to $3.56 million or 45.34% when compared to the same quarter last year. The firm also exceeded the industry average cash flow growth rate of 17.43%.
  • The company, on the basis of net income growth from the same quarter one year ago, has underperformed when compared to that of the S&P 500 and greatly underperformed compared to the Media industry average. The net income increased by 6.1% when compared to the same quarter one year prior, going from $1.10 million to $1.17 million.

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

Glowpoint ( GLOW) was another company that pushed the Telecommunications industry higher today. Glowpoint was up $0.02 (2.0%) to $1.06 on light volume. Throughout the day, 11,890 shares of Glowpoint exchanged hands as compared to its average daily volume of 19,400 shares. The stock ranged in a price between $1.00-$1.08 after having opened the day at $1.03 as compared to the previous trading day's close of $1.04.

Glowpoint has a market cap of $36.9 million and is part of the technology sector. Shares are down 5.5% year-to-date as of the close of trading on Thursday.

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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