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Ray Merola  

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  • Accumulate AT&T Shares While No One Is Paying Attention [View article]
    whiteowl

    Indeed. However, AT&T has the size and heft to weather a storm or wear out competitors. The size and strength of the organization makes it unlikely they have to apologize to anyone.

    I agree that disruptive technology and delivery systems could force the AT&T business model to adjust. But adjust it will; one of the things I try never to forget is that good businesses don't just "take it." They morph and re-imagine in a sea change.

    Which brings me to a concern about AT&T: while I believe the management team is competent, I am not overly impressed with the general cadence of the organization. I recognize that the CEO and CFO are the faces of the business, but there is a tone at the top. I'm not convinced this is a AT&T strength, though I'm not in the camp that it's a material weakness.
    Feb 25, 2015. 08:09 PM | 3 Likes Like |Link to Comment
  • Accumulate AT&T Shares While No One Is Paying Attention [View article]
    I agree, wdchil

    AT&T is not without risks: both from the outside and from within (execution risk). However, the dividend can cover a lot of hanging around waiting for things to sort out.

    Part of my investment thesis is the dividend (and its slow annual advance) is unassailable.
    Feb 25, 2015. 06:25 PM | 1 Like Like |Link to Comment
  • Accumulate AT&T Shares While No One Is Paying Attention [View article]
    jsehr

    Your point about AT&T using DirecTV as a segway to cross-selling other services is very important.
    Feb 25, 2015. 06:23 PM | 3 Likes Like |Link to Comment
  • Accumulate AT&T Shares While No One Is Paying Attention [View article]
    Absolutely, David. Absolutely. A rock-solid dividend yield of 5.5% cannot be swept under the rug. It's critical to the total return narrative, especially when reinvested.
    Feb 25, 2015. 06:21 PM | 5 Likes Like |Link to Comment
  • Accumulate AT&T Shares While No One Is Paying Attention [View article]
    Another good point, 21811041

    Forwards EPS is on future earnings, and as such, is dependent upon the accuracy of the forecast.
    Feb 25, 2015. 06:19 PM | 1 Like Like |Link to Comment
  • Accumulate AT&T Shares While No One Is Paying Attention [View article]
    Yes, David, this is correct.

    I've found that S&P IQ generally parallels the company's "operating earnings" closely. However, there's either a different "interpretation," or a bust from time-to-time.

    This is why I always utilize the company's web site to verify operating earnings. It's my prerogative to accept or dispute how they record operating earnings, but I want the company's numbers as a baseline.
    Feb 25, 2015. 06:18 PM | 1 Like Like |Link to Comment
  • Accumulate AT&T Shares While No One Is Paying Attention [View article]
    Thank you, Sonia

    My view is the dividend (and annual, but small raises) are quite safe. Management knows where their bread is buttered.
    Feb 25, 2015. 03:33 PM | 3 Likes Like |Link to Comment
  • Accumulate AT&T Shares While No One Is Paying Attention [View article]
    I think you've got a good plan, EsotericPath. Have to agree that we're due for some sort of general market pullback, and it may provide an opportunity to add a few AT&T shares at a better price.

    I'd like to do the same.
    Feb 25, 2015. 03:31 PM | Likes Like |Link to Comment
  • EOG Resources Not Interested In Race To The Bottom [View article]
    Excellent article, Casey

    EOG is the best-of-breed domestic producer. Focused upon returns, the management team is shareholder-friendly and arguably premier in the space.

    What are your thoughts around EOG talking about drilling, but not completing certain wells to maintain leasehold acreage? Is this a major issue?
    Feb 25, 2015. 01:53 PM | Likes Like |Link to Comment
  • Accumulate AT&T Shares While No One Is Paying Attention [View article]
    aida2003

    I believe the DTV deal is integral to where AT&T management wants to go. It's the #1 subscriber TV provider in Latin America. The business is placing a bet on expanding its services from the U.S. into Central and South America.

    So I think it's better for AT&T to get the deal done.

    The spectrum issue (for which AT&T paid a king's ransom) is paid over time. The company will pay largely through borrowing; the recent credit downgrade from A to BBB+ was a result of the spectrum deal. That's part of doing business here. No spectrum, no network growth. AT&T has an excellent domestic network.
    Feb 25, 2015. 01:44 PM | 4 Likes Like |Link to Comment
  • Accumulate AT&T Shares While No One Is Paying Attention [View article]
    Gary

    It's wise to check more than one valuation methods when attempting to place a forward target on a stock. There's any number of perfectly valid options; and up to the investor to decide which work best for a specific ticker. P/CF is excellent, and works well for businesses like AT&T that generate lots of operating cash. Indeed, AT&T 2014 EPS was $2.54. OCF per share was up there at $6.00.

    A major point of this article is I'm thinking one can purchase shares of AT&T that historically have offered very slow growth; but pocketing a potential ticket for modest growth through the aforementioned Latin America and telecommunication product initiatives. What do you think?
    Feb 25, 2015. 01:06 PM | 1 Like Like |Link to Comment
  • Accumulate AT&T Shares While No One Is Paying Attention [View article]
    Good comments, 21811041

    Chucks' approach is valid. I actually prefer a modified Graham-Dodd formula: P/E = 9 + (0.5g). In the case of T, this yields an even lower "theoretical" P/E result.

    Notice in the FAST graphs, the orange GDF P/E is 15x. There's been periods when AT&T has grown faster than 2.4%; but I am not sure why the chart used 15x versus 13.6x. Interesting point.

    In any event, the ACTUAL long-term, trimmed average P/E has been 16x. This is typically where I focus my attention.

    Certainly, your point is reasonable. When forecasting a target price, no one could argue using a GDF based, long-term 13.6x P/E isn't prudent. It would indicate that T shares are trading about fair value. It builds in a bigger factor of safety.
    Feb 25, 2015. 12:58 PM | 5 Likes Like |Link to Comment
  • Accumulate AT&T Shares While No One Is Paying Attention [View article]
    Hello smurf

    Thank you for reading and the kind words.

    Going in, DirecTV will remain very separate from AT&T. The FTC will require that. There's concerns about U-verse and DTV getting too close right away.
    Feb 25, 2015. 12:43 PM | 1 Like Like |Link to Comment
  • Accumulate AT&T Shares While No One Is Paying Attention [View article]
    8210021

    I've not tried to fully net out all the new revenue sources, particularly from the new international businesses (Iuacell and Nextel). Iusacell and Nextel aer relatively small: a billion or two in revenue. DirecTV is a bigger deal, bringing in ~$35 billion a year.

    Indeed, all these businesses have competition. However, the situation in Latin America is different than here in the U.S., where Teleco is hyper-competitive. In L.A., the penetration rate is far lower. It's a different ballgame in several respects. Part of the AT&T challenge will be operating in a non-U.S. environment.
    Feb 25, 2015. 12:40 PM | 4 Likes Like |Link to Comment
  • Accumulate AT&T Shares While No One Is Paying Attention [View article]
    Corbet,

    I agree. I don't mix my politics with investing if I can help it. The thing with our friends in Washington: wait awhile and they go away. Maybe for the better or worse, but they all go away eventually.
    Feb 25, 2015. 12:21 PM | 6 Likes Like |Link to Comment
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