3 Stocks Pushing The Telecommunications Industry Lower

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The Telecommunications industry as a whole closed the day down 1.3% versus the S&P 500, which was down 1.3%. Laggards within the Telecommunications industry included Glowpoint ( GLOW), down 2.1%, B Communications ( BCOM), down 3.3%, Internet Initiative Japan ( IIJI), down 7.1%, RR Media ( RRM), down 3.8% and Voltari ( VLTC), down 1.6%.

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

Internet Initiative Japan ( IIJI) is one of the companies that pushed the Telecommunications industry lower today. Internet Initiative Japan was down $0.72 (7.1%) to $9.47 on light volume. Throughout the day, 100 shares of Internet Initiative Japan exchanged hands as compared to its average daily volume of 2,900 shares. The stock ranged in price between $9.47-$9.47 after having opened the day at $9.47 as compared to the previous trading day's close of $10.19.

Internet Initiative Japan Inc., together with its subsidiaries, offers Internet connectivity, WAN, outsourcing, and systems integration services primarily in Japan. The company operates in two segments: Network Services and Systems Integration Business, and ATM Operation Business. Internet Initiative Japan has a market cap of $943.7 million and is part of the technology sector. Shares are up 2.7% year-to-date as of the close of trading on Thursday. Currently there is 1 analyst who rates Internet Initiative Japan a buy, no analysts rate it a sell, and none rate it a hold.

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TheStreet Ratings rates Internet Initiative Japan 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, reasonable valuation levels and good cash flow from operations. However, as a counter to these strengths, we also find weaknesses including disappointing return on equity and poor profit margins.

Highlights from TheStreet Ratings analysis on IIJI go as follows:

  • Although IIJI's debt-to-equity ratio of 0.28 is very low, it is currently higher than that of the industry average. Along with the favorable debt-to-equity ratio, the company maintains an adequate quick ratio of 1.20, which illustrates the ability to avoid short-term cash problems.
  • INTERNET INITIATIVE JAPAN INC has improved earnings per share by 16.7% in the most recent quarter compared to 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, INTERNET INITIATIVE JAPAN INC reported lower earnings of $0.49 versus $0.69 in the prior year.
  • The gross profit margin for INTERNET INITIATIVE JAPAN INC is currently lower than what is desirable, coming in at 26.13%. Regardless of IIJI's low profit margin, it has managed to increase from the same period last year. Despite the mixed results of the gross profit margin, IIJI's net profit margin of 2.90% is significantly lower than the industry average.
  • 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 Internet Software & Services industry and the overall market, INTERNET INITIATIVE JAPAN INC's return on equity is below that of both the industry average and the S&P 500.

You can view the full analysis from the report here: Internet Initiative Japan Ratings Report

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At the close, B Communications ( BCOM) was down $0.49 (3.3%) to $14.50 on light volume. Throughout the day, 150 shares of B Communications exchanged hands as compared to its average daily volume of 1,900 shares. The stock ranged in price between $14.50-$14.50 after having opened the day at $14.50 as compared to the previous trading day's close of $14.99.

B Communications Ltd. provides various communications services in Israel. B Communications has a market cap of $448.0 million and is part of the technology sector. Shares are down 15.6% year-to-date as of the close of trading on Thursday.

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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.
  • In its most recent trading session, BCOM has closed at a price level that was not very different from its closing price of one year earlier. This is probably due to its weak earnings growth as well as other mixed factors. Turning our attention to the future direction of the stock, we do not believe this stock offers ample reward opportunity to compensate for the risks, despite the fact that it rose over the past year.
  • 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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Glowpoint ( GLOW) was another company that pushed the Telecommunications industry lower today. Glowpoint was down $0.02 (2.1%) to $0.93 on heavy volume. Throughout the day, 31,300 shares of Glowpoint exchanged hands as compared to its average daily volume of 20,100 shares. The stock ranged in price between $0.90-$0.94 after having opened the day at $0.93 as compared to the previous trading day's close of $0.95.

Glowpoint has a market cap of $36.5 million and is part of the technology sector. Shares are down 7.3% year-to-date as of the close of trading on Thursday.

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