3 Stocks Advancing The Telecommunications Industry

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 47 points (0.3%) at 18,019 as of Friday, Feb. 13, 2015, 4:20 PM ET. The NYSE advances/declines ratio sits at 1,931 issues advancing vs. 1,153 declining with 128 unchanged.

The Telecommunications industry as a whole closed the day up 0.3% versus the S&P 500, which was up 0.4%. Top gainers within the Telecommunications industry included Nortel Inversora ( NTL), up 3.8%, Optical Cable ( OCC), up 1.6%, Iteris ( ITI), up 2.9%, China TechFaith Wireless Comm Tech ( CNTF), up 7.5% and iPass ( IPAS), up 4.5%.

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

China TechFaith Wireless Comm Tech ( CNTF) is one of the companies that pushed the Telecommunications industry higher today. China TechFaith Wireless Comm Tech was up $0.08 (7.5%) to $1.08 on average volume. Throughout the day, 94,441 shares of China TechFaith Wireless Comm Tech exchanged hands as compared to its average daily volume of 80,700 shares. The stock ranged in a price between $1.02-$1.08 after having opened the day at $1.02 as compared to the previous trading day's close of $1.00.

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 $51.5 million and is part of the technology sector. Shares are down 13.1% year-to-date as of the close of trading on Thursday. Currently there are no analysts who rate China TechFaith Wireless Comm Tech a buy, no analysts rate it a sell, and none rate it a hold.

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

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 and poor profit margins.

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 1878.7% when compared to the same quarter one year ago, falling from $0.26 million to -$4.59 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 8.76%. It has decreased from the same quarter the previous year. Along with this, the net profit margin of -20.75% is significantly below that of the industry average.
  • This stock's share value has moved by only 46.53% over the past year. 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.
  • CHINA TECHFAITH WIRELESS-ADR's earnings have gone downhill when comparing its most recently reported quarter with the same quarter a year earlier. 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

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

At the close, Iteris ( ITI) was up $0.05 (2.9%) to $1.80 on light volume. Throughout the day, 18,640 shares of Iteris exchanged hands as compared to its average daily volume of 34,900 shares. The stock ranged in a price between $1.74-$1.80 after having opened the day at $1.74 as compared to the previous trading day's close of $1.75.

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 $57.3 million and is part of the technology sector. Shares are up 2.6% 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.

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

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 2.7%. 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 14.96% to its most recent closing price of 1.82. 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

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

Nortel Inversora ( NTL) was another company that pushed the Telecommunications industry higher today. Nortel Inversora was up $0.84 (3.8%) to $22.97 on light volume. Throughout the day, 1,073 shares of Nortel Inversora exchanged hands as compared to its average daily volume of 1,600 shares. The stock ranged in a price between $22.48-$22.97 after having opened the day at $22.48 as compared to the previous trading day's close of $22.13.

Nortel Inversora S.A., through its subsidiary, Telecom Argentina S.A., provides fixed-line public and mobile telecommunication services. It operates through three segments: Fixed Services, Personal Mobile Services, and Nucleo Mobile Services. Nortel Inversora has a market cap of $3.0 billion and is part of the technology sector. Shares are up 5.4% year-to-date as of the close of trading on Thursday. Currently there are no analysts who rate Nortel Inversora a buy, no analysts rate it a sell, and none rate it a hold.

TheStreet Ratings rates Nortel Inversora as a hold. The company's strengths can be seen in multiple areas, such as its largely solid financial position with reasonable debt levels by most measures and solid stock price performance. However, as a counter to these strengths, we also find weaknesses including feeble growth in the company's earnings per share, disappointing return on equity and poor profit margins.

Highlights from TheStreet Ratings analysis on NTL go as follows:

  • NTL's debt-to-equity ratio is very low at 0.04 and is currently below that of the industry average, implying that there has been very successful management of debt levels. Although the company had a strong debt-to-equity ratio, its quick ratio of 0.80 is somewhat weak and could be cause for future problems.
  • NTL, with its decline in revenue, slightly underperformed the industry average of 2.0%. Since the same quarter one year prior, revenues fell by 11.9%. Weakness in the company's revenue seems to have hurt the bottom line, decreasing earnings per share.
  • The change in net income from the same quarter one year ago has significantly exceeded that of the Diversified Telecommunication Services industry average, but is less than that of the S&P 500. The net income has significantly decreased by 29.5% when compared to the same quarter one year ago, falling from $71.82 million to $50.61 million.
  • The gross profit margin for NORTEL INVERSORA SA is currently lower than what is desirable, coming in at 34.52%. It has decreased from the same quarter the previous year.
  • Net operating cash flow has decreased to $182.50 million or 31.82% when compared to the same quarter last year. In conjunction, when comparing current results to the industry average, NORTEL INVERSORA SA has marginally lower results.

You can view the full analysis from the report here: Nortel Inversora 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.

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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