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Yield-chasing investors should be wary of AT&T (T -1.5%, 4.8% yield) and Digital Realty (DLR...

Yield-chasing investors should be wary of AT&T (T -1.5%, 4.8% yield) and Digital Realty (DLR -5.4%, 4.6% yield), warns Jonathan Jacobson at the Sohn conference. AT&T's wireline ops are a "melting ice cube," Jacobson declares (revenue fell 1.8% Y/Y in Q1), and mobile competition is intensifying. As for DLR, he asserts "the data center [colocation] business is a commodity business" (ed: true, but it has been growing quickly), and accuses DLR of understating recurring capex. He also considers its dividend unsustainable without fresh capital-raising efforts. In addition to Jacobson's remarks, DLR appears pressured by Rackspace's Q1 miss.
Comments (9)
  • Totlco
    , contributor
    Comments (17) | Send Message
     
    Focusing on the shrinking landline revenues is misguided as all carriers are losing landline revenues and T is strong in all other aspects
    9 May 2013, 11:35 AM Reply Like
  • Copious28
    , contributor
    Comments (368) | Send Message
     
    Did he also mention his huge short positions when he talked up these obvious and apparent problems???
    9 May 2013, 11:38 AM Reply Like
  • bjamesh
    , contributor
    Comments (101) | Send Message
     
    Last time I checked he held a large position in Iron Mountain (IRM) which is getting into the secure data centre business at its "underground" limestone data storage facility. Conflict of interest?
    9 May 2013, 11:48 AM Reply Like
  • bjamesh
    , contributor
    Comments (101) | Send Message
     
    Approx. $382 million @ May 08/13 closing price.

     

    (9,737,184 x $39.27)

     

    http://bit.ly/10u9b9u
    9 May 2013, 12:54 PM Reply Like
  • Veritas1010
    , contributor
    Comments (1312) | Send Message
     
    T will find a way. Always do.

     

    long: T
    9 May 2013, 01:26 PM Reply Like
  • jumpnjoey77
    , contributor
    Comments (468) | Send Message
     
    I just bought 3000 more shares of T on the dip. Thanks John, keep talking.
    9 May 2013, 01:40 PM Reply Like
  • Rose_Colored_Glasses
    , contributor
    Comments (908) | Send Message
     
    Shocker alert - T land based systems not growing! Kennedy Shot!
    9 May 2013, 01:45 PM Reply Like
  • User 324575
    , contributor
    Comments (2) | Send Message
     
    Landline business should and will eventually disappear, just as the dinosaurs did. This is technological growth for a large Telco. Kiss the past goodbye and devote Mgt. time and resources to the future.
    9 May 2013, 03:37 PM Reply Like
  • everlast
    , contributor
    Comments (18) | Send Message
     
    What is the good news for T?
    9 May 2013, 05:37 PM Reply Like
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