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Analyst lifts rating for Inteliquent

NEW YORK (AP) -- Shares of Neutral Tandem rose Monday as a Morgan Stanley analyst boosted his rating for the voice services provider partly on its improved free cash flow position and available cash.

THE SPARK: The analyst Simon Flannery raised the rating for Neutral Tandem Inc. — which does business as Inteliquent — to "Equal-weight" from "Underweight."

THE ANALYSIS: In a client note, Flannery said that the recent data business sale puts Inteliquent back in a position where it's likely to see steady free cash flow generation. But the amount of free cash flow remains uncertain, as the company may see factors like additional capital requirements for new products eat into its free cash flow figure.

Inteliquent also has a cash balance of $85 million, which Flannery anticipates will be partially returned to shareholders through either a stock buyback or special dividend. Some of the cash may also be used for acquisitions, he added.

A representative for Inteliquent did not immediately respond to an email seeking comment.

SHARE ACTION: Neutral Tandem's stock climbed 57 cents, or 12 percent, to $5.34 in afternoon trading. The shares have traded in a range of $2.10 to $14.15 over the past year. For the year-to-date, the stock is up 85.6 percent.