Excerpt from Bill Nygren's March 31st letter to shareholders of the Oakmark Fund:
Sprint-Nextel (NYSE:S) — $19
We bought shares of Sprint-Nextel (S), the country’s third largest wireless telephony provider. Delays in integrating Sprint’s 2004 acquisition of Nextel have led to disappointing operating profits. Sprint’s stock price reflected that, falling from the mid-$20s to a first quarter low of under $17. During that time, other telecommunication stocks increased, resulting in Sprint now being priced at a lower multiple of cash-flow than competitors who get most of their income from the declining wired telephony business. Further, if Sprint’s subscribers were valued similarly to recent wireless acquisitions, Sprint stock would nearly double from its low. As with many of our holdings, we believe management will either improve operations or the company will be acquired.
See also: Bill Nygren's portfolio