AT&T is a long term pick

Fed Chair Janet Yellen said in a speech in Chicago yesterday that the recovery still feels like a recession to many Americans. The «overall comitment to maintain extraordinary support for the recovery for some time to come» is a strong one, she said.

«The scars from the Great Recession remain, and reaching our goals will take time», she said. U.S stocks moved to session high. S&P 500 up +0,79%. Dow up +0,82% and Nasdaq up +1,04%. It’s all green in Europe today too. All indices are up, but it was mixed in Asia earlier today.


The biggest U.S phone company AT&T Inc is planning to repurchase 300 million shares (about 6%) on its outstanding stock. AT&T Inc has acquired 775 million shares since 2012. They give itself room to boost shareholders returns and repurchasing 300 million shares would cost about $10,6 billion.

AT&T`s dividend yield is 5,2%. It is expected to see a net-debt-to-adjusted-EBITDA ratio in the 1,8 range or lower. This is a stock for value investors that offers reasonable dividend yields, low valuations and a solid margin of safety.

The stock has declined in 2013. Down from its high at $39. At&T Inc is now trading at $35,07. Both AT&T and Verizone are dropping but not a huge plunge, but they look worse when compared to the Dow`s gain.

The telecom sector is still unloved, and its all comes down to the never-ending radio spectrum battles. Companies like AT&T, Sprint, Verizone and T-Mobile sit on the losing end of this zero-sum equation.

Sprint investors are ignoring the good spectrum tidings, worried that this idea might be a needless cash flow killer. Building a so-called FirstNet will cost about $7 billion to build and there will be less pressure to make big money on the larger auction of former TV station frequencies next year.

Bad for Verizone and AT&T. Good for Sprint and T-Mobile, and great news and even better for the American people.

Reports today:
10:00 am. EST ISM Manufacturing PMI

Disclaimer: The views expressed in this article are those of the author and may not reflect those of Shiny bull. The author has made every effort to ensure accuracy of information provided; however, neither Shiny bull nor the author can guarantee such accuracy. This article is strictly for informational purposes only. It is not a solicitation to make any exchange in precious metal products, commodities, securities or other financial instruments. Shiny bull and the author of this article do not accept culpability for losses and/ or damages arising from the use of this publication

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