39% Annualized Return And AT&T
Chris DeMuth Jr. • 175 Comments
Chris DeMuth Jr. • 175 Comments
Going Long Leap Wireless: More Than A Leap Of Faith
Helix Investment Research
Helix Investment Research
Fri, Jul. 22, 12:44 PM
- Leaks that Verizon (VZ +1%) continues to be the front-runner to close a deal for core Yahoo (YHOO +1%) have the telecom spending about $5B on the deal, vs. an earlier $3.75B-$4B.
- While earlier Verizon interest excluded Yahoo's patent portfolio and real estate, the current talks do reportedly include the real estate.
- Yahoo had set aside about 3,000 patents into a subsidiary called Excalibur for separate auction by Black Stone IP, though other bidders like AT&T (T +1.5%) or a group with Quicken Loans' Dan Gilbert (still reportedly talking with Yahoo) or an aggressive TPG might yet want to buy the IP along with core assets.
- The deal would be a "great outcome," Piper Jaffray analyst Gene Munster says, with time of the essence since "the real value here is unlocking Yahoo Japan and Alibaba (BABA +0.1%) in a cash-free transaction. And they really need to get that done before the election."
- The $5B figure is still a bit low, Munster says, as he expects the deal to be around $6B. "If you look at the tax benefit for Yahoo Japan and Alibaba, that's about a $10B or $11B tax benefit, so a billion dollars here and there doesn't make much difference; there's still upside to Yahoo shares."
Thu, Jul. 21, 4:22 PM
- AT&T (T -0.4%) is off 1.3% after hours following a Q2 report where the company met profit expectations but missed slightly on revenues that grew nearly 23% thanks to DirecTV.
- Entertainment group revenues rose 120% Y/Y, again thanks to the acquisition of DirecTV, which saw 342,000 adds. Total video declined 49,000 as the company continued to steer customers from its U-verse platform to the more profitable DirecTV.
- In Mobility, the company posted 2.1M net adds in North America (1.4M in U.S., including 257,000 postpaid and 365,000 prepaid). In Mexico, 780,000 branded net adds to hit about 10M subscribers.
- Business Solutions revenues were down 0.5% but flat after adjusting for divestiture and foreign exchange. Wireless service revenues rose 2.7%; strategic services revenue was up 8.4%.
- The company say it's "on track to meet or beat" guidance for full 2016 even with a ramp up in its Mexico investment.
- Conference call to come at 4:30 p.m. ET.
- Press Release
Thu, Jul. 21, 4:02 PM
Wed, Jul. 20, 5:35 PM
- AT&T (NYSE:T) and Orange (NYSE:ORAN) are working together to push software-defined networking and network function virtualization, two areas that will benefit increasing standardization in network deployment.
- That will add flexibility and simplicity to network service provisioning (and reduce costs along the way) by pursuing open-source solutions.
- The two said they would concentrate on equipment for customer premises, on streamlining onboarding for virtual network functions, and on making APIs that should ease interoperability of different SDN architectures.
Wed, Jul. 20, 5:35 PM
Tue, Jul. 19, 1:13 PM
- The typical metrics that telecom investors examine may not matter as much to their holdings as a favorable macroeconomic environment, industry analyst Craig Moffett writes.
- That's accounting for the price war as well as common bellwethers like average revenue per user, he says. In most industries, developments like telecom has seen in the past year (Verizon's (VZ -0.5%) recent moves to reset pricing; T-Mobile's (TMUS -0.3%) un-carrier promotions; aggressive phone financing revamps) would spur meaty debates about valuation and growth: "But telecom isn't most industries. It has now been a full decade since fundamentals were last a major part of the telco equity performance story (good or bad)."
- Fundamentals may matter again soon, ahead of a new iPhone introduction (that could benefit T-Mobile and Sprint (S -3.9%) more than AT&T and Verizon), and AT&T's (T -0.2%) full integration of DirecTV finances.
- But in the meantime, macro factors are still prevalent: "When interest rates are falling and the dollar is rising, the story appears to have been pretty straightforward, after all: Buy telecom."
Tue, Jul. 19, 9:27 AM
- Five bidders are left after a final deadline in an auction for the core business of Yahoo (NASDAQ:YHOO), CNBC reports.
- The company hadn't provided details with its earnings report yesterday other than to say it was deep into proposals.
- It's now expected to finish the bidding process entirely by the end of July.
- There's yet no word on who the five are, but numerous media reports have zoomed in on Verizon (NYSE:VZ) as a favorite, with AT&T (NYSE:T) still in the running along with private-equity combinations and a group led by Quicken Loans' Dan Gilbert and backed by Warren Buffett.
Fri, Jul. 15, 10:36 AM
- AT&T (T +0.4%) is setting its own bar high for investing in Mexico, targeting becoming the country's leading operator within 10 years -- a tall order involving unseating incumbent America Movil (NYSE:AMX).
- The company wants to cover 75M people in Mexico by the end of this year, and 100M by the end of 2018. That's toward AT&T's larger goal of a North American area covering 400M. It's investing $3B into Mexico to hit those goals.
- According to the Federal Telecommunications Institute, America Movil has a 68% share of the mobile market; Telefonica (NYSE:TEF) has 23.2% and AT&T just 8.1% for now.
Fri, Jul. 15, 10:10 AM
- Wells Fargo ticks off 20 S&P 500 stocks with the most upside potential vs. consensus, and the 20 with the most downside risk vs. consensus.
- The list is compiled by comparing the midpoint of Wells Fargo Securities valuation ranges to consensus fair value estimates, volatility adjusting the percentage difference, and ranking the resulting score.
- Upside: AEE, BEN, CCL, DVA, EIX, ES, EXC, FTR, HUM, INTC, JNJ, LNT, PEG, PNW, SCG, T, WEC, WU, XEL, XOM.
- Downside: ANTM, C, CI, COF, EQT, FOXA, FSLR, GS, KIM, LH, MON, MSI, MYL, NVDA, NWSA, SLG, TIF, TSO, UA, WLTW.
Fri, Jul. 15, 10:02 AM
- Thomas Lee from Fundstrat Market & Equity Research ("our research process combines both top-down strategy and bottoms-up fundamental views, to develop a roadmap of practical and useful investment insights for our clients") identifies 15 stocks that meet his criteria for his current “highest conviction” strategies, which he calls “laggards become leaders” and “stocks are the new bonds.”
- The following stocks are in 1 of 16 groups that have lagged in the bull market (laggards), and have dividend yield greater than the their long-term bond yield (stocks are the new bonds): APD, CAT, CSCO, CVX, HP, IBM, OXY, PCAR, PG, PX, RL, SLB, T, VZ, XOM.
Thu, Jul. 14, 3:38 PM
- The FCC voted unanimously today to open up four bands of frequencies above 24 GHz for 5G wireless service, setting the stage for exploiting next-generation technologies for mobile transmission.
- That's nearly 11 GHz of spectrum (3.85 GHz in licensed bands at 28 GHz, 37 GHz and 39 GHz, and 7 GHz in an unlicensed band between 64 GHz and 71 GHz).
- The agency says companies will be able to exploit the spectrum for "fiber-fast" capabilities, up to 100 times faster than current 4G networks.
- In addition, the agency pledged to push for opening up more millimeter wave bands as quickly as it can, via a Further Notice of Proposed Rulemaking that looks to apply today's rules to another 18 GHz of spectrum (in eight additional high-frequency bands)
- In related stocks: (T +0.5%); (VZ -0.2%); (TMUS -0.5%); (S +1.9%); (DISH +1%); (CMCSA +0.4%); (STRP +5.7%); (GSAT -1.2%)
Thu, Jul. 14, 1:40 PM
- FCC Chairman Tom Wheeler says in a blog post that he won't offer up new rules regarding retransmission-rights negotiations between TV programmers and providers.
- The stance comes alongside an increasing environment for disputes and lengthy blackouts of TV service as pay-TV companies and content creators tussle over the increasing costs of programming.
- Based on staff review, "it is clear that more rules in this area are not what we need at this point ... So, today I announce that we will not proceed at this time to adopt additional rules governing good faith negotiations for retransmission consent."
- Wheeler says Congress could yet expand the FCC's scope of authority which could provide for more action. But "What we need is not more rules, but for both sides in retransmission consent negotiations to take seriously their responsibility to consumers."
- Dish Network (NASDAQ:DISH) and Tribune Media (NYSE:TRCO) are in the middle of an ongoing fight, including a blackout.
- Pay TV players: CMCSA, TWC, CHTR, CVC/OTCPK:ATCEY, T, DISH, VZ, FTR, CTL
Wed, Jul. 13, 7:31 PM
- House testimony today indicates that an FCC proposal to open the market for TV set-top boxes may be losing its majority.
- FCC Commissioner Jessica Rosenworcel -- considered a swing vote here -- acknowledged under questioning that the proposal (voted to move forward on party lines in February) was flawed.
- Asked by Rep. Marsha Blackburn to answer only yes/no, Rosenworcel and GOP commissioners Ajit Pai and Michael O'Rielly said "yes" to the question "Do you agree that the initial FCC set-top proposal is flawed?" Rosenworcel also said "yes" to "Do you agree that if the FCC is to move forward, it should follow a different approach than outlined in the NPRM?"
- FCC Chairman Tom Wheeler admitted that a "Ditch the Box" counter-proposal from the TV industry, focused on using apps, showed "promise," but said "One page is not a proposal; it is a press release."
- Pay TV players: CMCSA, TWC, CHTR, CVC/OTCPK:OTCPK:ATCEY, T, DISH, VZ, FTR, CTL
Wed, Jul. 13, 7:01 PM
- The Communications Workers of America has notified AT&T (T +0.4%) that its represented employees for Mobility have failed to ratify a new four-year contract.
- That contract would have covered more than 40,000 AT&T Mobility employees represented by the union nationwide. The two sides have agreed to meet to work on an acceptable agreement.
- The pact in question is focused on benefits (including healthcare), while issues including wages, pension and work rules are negotiated in separate deals.
- After hours: T -0.1%.
Fri, Jul. 1, 3:33 PM
- The FCC says it will reveal the names of bidders in the forward auction portion of the broadcast incentive spectrum auction, setting the start of the next phase likely in mid-July.
- There are about 100 parties eligible to bid and they have a payment due by 5 p.m. today, which will validate a final list. A 15-business-day period has to follow public notice of the bidders.
- The reverse auction concluded this week with the agency needing to raise $88B to cover $86.4B in payments to broadcasters, a sum that could mean changes to the process (including multiple rounds) as the FCC works to scare it up.
- Spectrum players: VZ, T, TMUS, S, DISH, SBGI, EVC, CMCSA, CHTR, NXST, CBS, MEG
Fri, Jul. 1, 7:30 AM
- June monthly performance was: +1.86%
- 52-week performance vs. the S&P 500 is: +4%
- $0.07 in dividends were paid in June
- Top 10 Holdings as of 3/31/2016: General Mills Inc (GIS): 3.41805%, AT&T Inc (T): 3.01284%, Coca-Cola Co (KO): 2.95236%, Campbell Soup Co (CPB): 2.78964%, Exelon Corp (EXC): 2.28957%, The Hartford Financial Services Group Inc (HIG): 2.24568%, Heineken NV (OTCQX:HINKF): 2.15959%, The Kraft Heinz Co (KHC): 1.97668%, Suncor Energy Inc (SU): 1.86666%, PPL Corp (PPL): 1.86557%
AT&T, Inc. provides telecommunication services and products, including wireless communications, local exchange services, long-distance services, data/broadband and Internet services, video services, telecommunications equipment, managed networking and wholesale services. It operates business... More
Industry: Telecom Services - Domestic
Country: United States
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