Sprint Nextel by Michael Santoli
Highlighted companies: Sprint Nextel Corp. (S), AT&T Inc. (T)
Summary: With 30% average gains in the sector, few telecom companies had a weak 2006. But don't tell that to Sprint Nextel Corp. (S) shareholders, who saw shares drop 11% on three straight earnings misses and a poorly received merger integration. Only one-third of all Wall Street analysts now recommend Sprint; 70% like competitor AT&T Inc. (T). Contrarian value seekers should be encouraged by such sour sentiment, and the stock's relative cheapness. Sprint has a $56 billion market cap, less debt than its competitors, is buying back $6 billion of its stock, as well betting $3 billion on up-and-coming local WiMax wireless data networks. Even if the company continues to struggle, the stock's cheap, and a buyout is not out of the question. "All of which shifts the risk/reward bargain in investors' favor."
Related links: Sprint Close to Choosing Nokia as Its Third and Final Wimax Partner, Will Comcast Buy Sprint?, Comcast Exec Denies Sprint Buyout Plans, Pali: Sprint Buyout Rumors Are False, Stock's Overpriced, Verizon and Sprint: The Prince and The Pauper, Sprint Nextel: All You Need is Patience, Sprint Nextel Q3 2006 Earnings Call Transcript