3 Stocks Pushing The Telecommunications Industry Lower

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The Telecommunications industry as a whole closed the day down 0.2% versus the S&P 500, which was down 0.4%. Laggards within the Telecommunications industry included Glowpoint ( GLOW), down 5.6%, Internet Gold Golden Lines ( IGLD), down 6.7%, B Communications ( BCOM), down 4.9%, Voltari ( VLTC), down 2.5% and China TechFaith Wireless Comm Tech ( CNTF), down 3.0%.

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

B Communications ( BCOM) is one of the companies that pushed the Telecommunications industry lower today. B Communications was down $0.80 (4.9%) to $15.60 on light volume. Throughout the day, 1,008 shares of B Communications exchanged hands as compared to its average daily volume of 2,800 shares. The stock ranged in price between $15.29-$15.60 after having opened the day at $15.29 as compared to the previous trading day's close of $16.40.

B Communications Ltd. provides various communications services in Israel. B Communications has a market cap of $477.5 million and is part of the technology sector. Shares are down 10.0% year-to-date as of the close of trading on Friday.

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TheStreet Ratings rates B Communications as a sell. The company's weaknesses can be seen in multiple areas, such as its deteriorating net income, generally high debt management risk and disappointing return on equity.

Highlights from TheStreet Ratings analysis on BCOM 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 Diversified Telecommunication Services industry. The net income has significantly decreased by 5940.8% when compared to the same quarter one year ago, falling from $3.98 million to -$232.70 million.
  • The debt-to-equity ratio is very high at 15.80 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 0.82, 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.
  • BCOM, with its decline in revenue, underperformed when compared the industry average of 2.0%. Since the same quarter one year prior, revenues fell by 27.2%. Weakness in the company's revenue seems to have hurt the bottom line, decreasing earnings per share.
  • B COMMUNICATIONS LTD 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. This company has not demonstrated a clear trend in earnings over the past 2 years, making it difficult to accurately predict earnings for the coming year. During the past fiscal year, B COMMUNICATIONS LTD increased its bottom line by earning $1.26 versus $0.41 in the prior year.

You can view the full analysis from the report here: B Communications Ratings Report

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