Just when I begin to feel like my long time favorite stock, AT&T (T), has reached some sort of peak, the company turns around and takes another step towards increasing earnings and moving the stock higher.
Yes, I know I am a hopeless cheerleader of this company, and I did happen to pick AT&T as my personal stock pick of 2012 (AT&T: My Stock Pick Of 2012 ), but shouldn't I be listening to the naysayer's out there who have been actually advising folks to either avoid, or sell?
Not a snowball's chance in Hades folks!
All The Right Moves
I know, I know, this was also the title of a movie that I did not see, but it also fits with AT&T. Ever since the mess with T-Mobile, AT&T has been doing just about everything right (including setting aside the $4 billion in compensation for the failed merger).
Now the just go and do something right once again; They changed the shared data plan fees. While it is basically the same plan as Verizon (VZ), but T charges just a tad more.
As this New York Times article notes:
"AT&T on Wednesday released details of its shared data plans, which will allow customers to pay for a pool of wireless data and share it across multiple smartphones, tablets and laptops. It will be the second American carrier to offer this type of plan, following Verizon Wireless.
The main purpose was to get subscribers off of those unlimited data plans which hampered margins, and onto a plan that allows the consumer to share a pool of other data users at reasonable prices.
At the same time, AT&T will be able to increase revenues and margins once again.
"Tablets, computers and traditional cellphones have different individual costs as well. A tablet is $10 a month, a laptop is $20 a month and a cellphone is $30 a month.
Verizon's prices are similar. A smartphone costs $40 a month, a normal cellphone $30 and a tablet $10. The monthly fee for the shared data pool ranges from $50 for 1 gigabyte to $100 for 10 gigabytes. A family with four smartphones on Verizon's 1 GB shared plan would pay $210 a month. Both AT&T and Verizon charge a $15 overage fee when you surpass the amount of data purchased."
Tablets, tablets, and more tablets. The latest and greatest gadget is also being addressed with separate plans of their own (more revenues, more profits, folks).
As far as I am concerned, this paves the way for yet another master stroke by AT&T (OK, yes, Verizon also); elimination of the subsidies to the manufacturers eventually. Apple (AAPL) and the rest will be on their own at that point. Want a discount? Fine, Apple will pay AT&T for their new toys to sell. Why not? They have oodles of cash!
Ok, enough of my cheerleading and fact finding. There are plenty of folks who prefer Verizon over AT&T for their portfolios. I am gonna stick with the "big dog" for now. It has served our portfolio quite well, and I think we are just getting started!
Next stop; $40.00/share?
Disclosure: I am long T.