The communications services industry is large. It encompasses network service providers, web software companies, social media giants and more. This emphasis on technology is evident as some companies in the industry, such as Facebook, were previously classified as information technology companies.
Even before the COVID-19 hit, the area was designated as “critical infrastructure” by the US government. However, the pandemic period has shown how much the world depends on communications service companies. Millions of people have spent months locked in their homes, isolated from family and friends. This has made a good internet connection and web entertainment essential for many of us.
It can be a flashy and exciting industry to invest in. The industry is teeming with innovative ideas from Silicon Valley and giant corporations with tens of millions of customers. However, there are risks associated with this industry. Perhaps foremost among them is regulatory risk, which has been of particular relevance in recent years due to concerns about how businesses handle users’ personal data.
Some of the major players in the US communications services industry are:
- T Mobile
Actions of communication dynamics in Q4
Momentum refers to the speed or rate of change in the stock price. Healthy price trends tend to show strong momentum and prices weaken when momentum wanes. The following stocks have gained momentum in recent weeks. Can their streak continue until the fourth trimester?
- Belden Inc. (NYSE: BDC)
- Napco Security Technologies Inc (NASDAQ: NSSC)
- Clearfield, Inc. (NASDAQ: CLFD)
Belden inc. operates as a signaling solutions company in the Americas, Europe, Middle East, Africa and Asia-Pacific. Sales and EPS growth have shown significant growth, and BDC stock is showing momentum.
Napco Security Technologies, Inc. develops, manufactures and sells electronic security products in the United States and around the world. NSSC stock has seen momentum since it exceeded earnings and income estimates in its fourth quarter results.
Clearfield, Inc. manufactures, markets and sells standard and custom passive connectivity products from fiber-optic companies to local and original equipment manufacturer markets in the United States and around the world. CLFD stock has benefited from strong price momentum over the past year, as well as sales and EPS growth.
Communication growth values in Q4
Growth in sales and / or earnings per share indicates a growing business. Growth stocks can make very lucrative investments when the stock price rises as the business grows. But growth stocks are also risky, as investment analysis is based on future price movements rather than historical price performance. Famous growth investors include Philip Fisher, T. Rowe Price, and Jim Slater.
- Location and control of Ituran (NASDAQ: ITRN)
- Calix Inc. (NYSE: CALX)
- ADTRAN (NASDAQ: ADTN)
Ituran Location and Control Ltd., together with its subsidiaries, provides location services and wireless communication products. ITRN shares show solid price momentum as well as significant growth in sales and EPS.
Calix, Inc., together with its subsidiaries, provides cloud and software platforms, systems and services in the United States, the Middle East, Canada, Europe, the Caribbean and internationally. CALX share shows momentum and sales growth. Calix is a quality company.
ADTRAN, Inc. provides networking and communication platforms and services for service providers, cable / multi-system operators, small and medium-sized businesses, and distributed businesses in the United States, Germany, Mexico and internationally. ADTRAN is a quality company with a low price / sales ratio, EPS growth and a dividend yield of 1.9%.
Q4 Equity Value Communications
Value investing is a very popular type of stock market investing advocated by billionaire investor Warren Buffett. When growth stocks are in favor, value stocks tend to be less popular and vice versa. Value stocks should trade for less than their intrinsic or book value.
- NetGear, Inc. (NASDAQ: NTGR)
- Electronic Systems Technology Inc (OTCMKTS: ELST)
- Franklin Wireless Corp. (NASDAQ: FKWL)
NETGEAR, Inc. designs, develops and markets networking and Internet-connected products for consumers, businesses and service providers. Hamed Khorsand, Wall Street analyst at BWS Financial, recently marked NTGR stock as overweight.
Electronic Systems Technology, Inc., doing business as ESTeem wireless modems, designs, develops, manufactures and markets industrial wireless products and accessories in the United States and around the world. ELST action has gained momentum over the past year. It also exhibits low price-to-book (P / B) and price-to-sales (P / S) ratios.
Franklin Wireless Corp. provides smart wireless solutions. The company’s products include mobile hotspots, routers, trackers and other devices, which integrate hardware and software to enable machine-to-machine (M2M) and Internet of Things (IoT) applications. .
FKWL stock has low price-to-earnings (P / E), price-to-book (P / B) and price-to-sell (P / S) ratios. It is a quality company whose share price is potentially undervalued but which is undoubtedly a risky investment.