AT&T: My Stock Pick Of 2012

Nov.21.11 | About: AT&T Inc. (T)

Underestimated, unappreciated, and under-priced. That spells MONEY in my book.

I am going to "call" my personal big winner for 2012 right here on Seeking Alpha.

I have done this for the past 15 years or so, for myself and my family, never really letting anyone in on my "secret", but now, given the Seeking Alpha forum we have, I will let millions upon millions of you in on my personal "crystal ball" prediction. Well, obviously, I don't REALLY have a crystal ball (surprise, surprise), but I will just put myself out on a limb and pick the ONE stock that I believe will offer the amazing returns that we all hope for. (It is still my OPINION folks, so don't do anything rash.)

This being the holiday season and all, I will formally embarrass myself by leaking it out for everyone to make fun of.

My Stock Pick For 2012

AT&T (NYSE:T): Price-$28.64/Share, Dividend Yield of 6.0%, ESS Rating: VERY Bullish

Not only is AT&T trading at nearly its 52 week low of $27.20, its 5 year chart has been far too lackluster for what the company itself has to offer. (Here is the chart.)

Its 5 year high of $42.44/share was reached way back in December 2007, and since that time it has dropped way too much and has been way too cheap from my perspective.

It became an accidental high yielder also (as Jim Cramer would say) and at its current low price, as well as a 6.0% yield, is pretty darn good for a "big kahuna" brand name stock like AT&T.

I do realize that not everything has been amazingly wonderful as far as performance goes, but it has met or exceeded the estimates for 9 consecutive quarters, and now the estimates are so skimpy that I believe it will blow them away. (The 4th quarter estimate is .53/share).

Even though the PPS has wallowed in the low end of the spectrum it has managed to have a 5 year dividend growth average of about 5.3% anyway. So it is still giving shareholders more back even as its valuation has dipped.

Let's Look at What It Has

1) The iPhone is still the gold standard (as such, AT&T still sells more than anyone else) and they continually upgrade and offer the best of all the stuff out there in my opinion, and sales are still brisk, and they are always selling out. The competitors have not made much of a dent as many folks thought they would, so I see bigger growth here.

2) The iPad is also still the gold standard (as such, AT&T still sells more than anyone else) and I do not feel that Apple (NASDAQ:AAPL) will let Amazon (NASDAQ:AMZN) get away with biting off market share with a $199.00 Kindle Fire version which has gotten less than positive reviews. I can envision Apple coming out with its own lower priced entry level iPad, and AT&T will sell the heck out of it, if and when Apple decides enough is enough. This could be a biggie folks.

3) AT&T's churn rate of existing customers has not increased since the other players have gotten into the "iThing" business, which obviously says volumes about AT&T's customer service and loyalty in most areas, and that is another good sign for me.

4) AT&T is consistently improving its broadband coverage, adding coverage, and is well situated in the CLOUD phenomenon, which of course keeps it cutting edge as well as being positioned for growth in the business world also.

5) There are 9 strong buy recommendations, 9 buy recommendations, and 14 hold recommendations, from all of the leading analysts out there, with no sell recommendations for many, many months.

6) AT&T has the largest market cap in its sector, as well as valuation, and there are no reasons I can find that will knock them off the top of the hill anytime in the near term, OR long term.

My Opinion

I have had a pretty decent track record actually with my "pick of the year" suggestions. My best one ever was Altria (NYSE:MO) back when it was around $21.00/share, prior to its spin off days (December 1999), and while all the big lawsuits were hitting the courts. The dividend was ridiculously high (around 15% if I recall) and it was still selling products, and had enough money to cover most of the civil settlements anyway. If you bought it back then, and held it for 7 years, it went over $90.00 share in 2007, plus you would have kept getting that dividend and made a relative fortune.

I have not duplicated that one yet. Will AT&T be the ONE in 2012? Well, it is my personal pick. Do some research and see if it might be a good one for you.

Disclosure: I am long T, AAPL.

Additional disclosure: I will also be adding to my position in AT&T next week.