Top 10 August WallStar Communication Services Gains Were Led By Telefonica, China Mobile, And Vodafone; U.S. Telecoms Did Not Place

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Includes: BT, CHA, CHL, CNSL, CTL, IDT, MBT, MTNOY, ORAN, PHI, SKM, T, TEF, TEO, TKC, VIV, VOD
by: Fredrik Arnold
Summary

WallStars show positive broker target price-upsides. Overseas high-yield telecom firms remained at the top by broker-gains this month as North American telcos failed to make analysts top ten.

All top ten net gain Communications Services WallStars hailed from overseas (CHA, BT, VIV, ORAN, MBT, VOD, TKC, CHL, TEF, & TEO). The top 2 averaged 64.7% gains.

Four North American firms, CNSL, CTL, IDT, & T, managed to rank in the WallStar top ten by yield: PHI; T; IDT; VIV; SKM; VOD; MBT; TEO; CTL; CNSL.

Those 10 WallStar Communication Services top yield stocks, ranged in yield from 5.81% to 11.54% as clocked August 3.

$5k invested in the lowest-priced five August top-yield Communication Services WallStars showed 2.28% LESS net gain than from $5k invested in all ten.  Higher price big dogs held their lead into August.

Actionable Conclusion (1-10): Analysts Predicted 28.7% To 70.2% Net Gains From Top Ten Communication Services WallStars To August 2019

Four of ten top gaining Comm Services WallStars, based on analyst 1-year target prices, were also among the top ten dividend-yielders for the coming year (as tinted in the chart above). Thus, the yield-based forecast for Comm Services, as graded by Wall St. wizards, was 40% accurate.

Projections, based on estimated dividends from $1000 invested in each of the thirty highest yielding stocks and their aggregate one year analyst median target prices, as reported by YCharts, created the 2018-19 data points. Note: one year target prices by lone analysts were not applied. Ten probable profit-generating WallStar trades projected to August 3, 2019 were:

Telecom Argentina (TEO) was projected to net $701.56, based on dividends, plus median target price estimates from ten analysts, less broker fees. The Beta number showed this estimate subject to volatility 10% more than the market as a whole.

Telefonica (TEF) was projected to net $591.96, based on dividends, plus median target price estimates from two analysts, less broker fees. The Beta number showed this estimate subject to volatility 14% more than the market as a whole.

China Mobile (CHL) netted $490.35 based on dividends plus the median from price estimates by three analysts, less broker fees. The Beta number showed this estimate subject to volatility 46% less than the market as a whole.

Turkcell Iletisim (TKC) was projected to net $486.06, based on four analysts, plus dividends, less broker fees. The Beta number showed this estimate subject to volatility 4% less than the market as a whole.

Vodafone Group (VOD) was projected to net $437.4, based on median target price estimates from three analysts, plus projected annual dividend, less broker fees. The Beta number showed this estimate subject to volatility 19% less than the market as a whole.

Mobile Telesystems (MBT) was projected to net $428.60, based on dividends, plus mean target price estimates from sixteen analysts, less broker fees. The Beta number showed this estimate subject to volatility 11% more than the market as a whole.

Orange (ORAN) was projected to net $394.61, based on a median target price estimate from two analysts, plus projected annual dividend, less broker fees. The Beta number showed this estimate subject to volatility 37% less than the market as a whole.

Telefonica Brasil (VIV) was projected to net $334.81, based on a median target price estimate from thirteen analysts, plus projected annual dividend, less broker fees. The Beta number showed this estimate subject to volatility 42% more than the market as a whole.

BT, Group, Inc. (BT) was projected to net $323.33, based on a median target price estimate from three analysts, plus projected annual dividend, less broker fees. The Beta number showed this estimate subject to volatility 9% less than the market as a whole.

China Telecom Corp (CHA) was projected to net $286.98 based on a median target pice estimate from three analysts, plus dividends, less broker fees. The Beta number showed this estimate subject to volatility 23% under the market as a whole.

Average net gain in dividend and price was estimated at 44.76% on $10k invested as $1k in each of these ten stocks. This gain estimate was subject to average volatility 6% under the market as a whole.

Top 30 Communication Services By Yield and Gains Represented Both Telecom & PayTV Industries In August

Yield (dividend / price) results from YCharts August 3, verified by YahooFinance, showed fifty stocks from just one of the two Communication Services sector Industries and produced actionable conclusions for this article. This month the Pay TV industry was not represented.

The Dividend Dogs Rule

Stocks earning the "dog" moniker exhibited three traits: (1) paying reliable, repeating dividends, (2) their prices fell to where (3) yield (dividend/price) grew higher than their peers. Thus, the highest yielding stocks in any collection became known as "dogs." More precisely, these are, in fact, best called, "underdogs".

50 Top Communication Services WallStars By Target Gains

Top 50 August Communication Services WallStars By Yield

Actionable Conclusion (11-20) Yield Metrics Selected 10 Top Communication Services Stocks

Top ten Comm Services WallStar stocks selected 8/37/18 with top yields represented one of two industries constituting the sector: (1) telecom services [10 listed]; (2) pay tv [0 listed].

Top yield communication services stock, Consolidated Communications Holdings (CNSL) (1) out-yielded the second place CenturyLink (CTL) [2], which was ahead of the third place (Telecom Argentina (TEO) [3], which was followed by Mobile Telesystems (MBT) [4]; Vodafone Group VOD) [5]; SK Telecom (SKM) [6]; Telefonica Brasil (VIV) [7]; IDT Corp (IDT) [8]; AT&R, Inc. (T) [9]; MTN Group (OTCPK:MTNOY) [8]; Vodafone Group (VOD) [9]; PLDT Inc. (PHI) [10], to complete the roster of top ten WallStars for August by yield.

Actionable Conclusions (21-30): WallStars Showed 27.5% To 60.8% Upsides To August, 2019

To quantify top rankings, analyst median price target estimates provided a "market sentiment" to gauge upside potential. Added to the simple high-yield metrics, analyst mean price target estimates became another tool to dig out bargains.

Brokers Believe A 2.28% Disadvantage In Play For 5 Highest Yield, Lowest Priced Communication Services Equities To August, 2019

Ten top Communication Services WallStars were culled by yield for their quarterly update. Yield (dividend / price) results verified by YCharts did the ranking.

As noted above, ten top Comm Services stocks selected 6/27/18 showing the highest dividend yields represented one industry in the two industry sector scheme.

Actionable Conclusions: Analysts Predicted 5 Lowest-Priced of the Top Ten Highest-Yield Comm Services Dogs (28) Delivering 26.58% Vs. (29) 27.2% Net Gains by All Ten by August, 2019

COMWS (6)10 GAINS AU18-19

$5000 invested as $1k in each of the five lowest-priced stocks in the top ten Communication Services High Yield collection were predicted by analyst 1-year targets to deliver 2.28% less net gain than $5,000 invested as $.5k in each of all ten. The sixth lowest priced Communication Services top-ten yield stock, Telecom Argentina (TEO), was projected to deliver the best net gain of 70.16%.

The five lowest-priced Communications Services top yield stocks for August 3 were: IDT Inc. (IDT); Mobile Telesystems (MBT); Consolidated Communications Holdings (CNSL); (CTL), with prices ranging from $5.30 to $18.83.

Five higher-priced Communications Services stocks for August 3 were: Telecom Argentina (TEO); Vodafone Group (VOD); PLDT, Inc. (PHI); SK Telecom (SKM); AT&T, Inc. (T), whose prices ranged from $20.21 to $32.27.

The distinction between the five low-priced dividend dogs and the general field of ten reflected Michael B. O'Higgins' "basic method" for beating the Dow. The scale of projected gains based on analyst targets added a unique element of "market sentiment" gauging upside potential. It provided a here-and-now equivalent of waiting a year to find out what might happen in the market. Caution is advised, since analysts are historically only 20% to 80% accurate on the direction of change and just 0% to 20% accurate on the degree of change.

See my instablog for specific instructions about how to best apply the dividend dog data featured in this article, this glossary instablog to interpret my abbreviated headings, and this instablog to aid your safe investing. --Fredrik Arnold

The net gain/loss estimates above did not factor in any foreign or domestic tax problems resulting from distributions. Consult your tax advisor regarding the source and consequences of "dividends" from any investment.

Stocks listed above were suggested only as possible reference points for your Communication Services WallStar stock purchase or sale research process. These were not recommendations.

Disclaimer: This article is for informational and educational purposes only and should not be construed to constitute investment advice. Nothing contained herein shall constitute a solicitation, recommendation or endorsement to buy or sell any security. Prices and returns on equities in this article except as noted are listed without consideration of fees, commissions, taxes, penalties, or interest payable due to purchasing, holding, or selling same.

Graphs and charts were compiled by Rydlun & Co., LLC from data derived from www.indexarb.com; YCharts.com; finance.yahoo.com; analyst mean target price by Thomson/First Call in YahooFinance or YCharts. Dog photo: ebay.com

Disclosure: I am/we are long T. I wrote this article myself, and it expresses my own opinions. I am not receiving compensation for it (other than from Seeking Alpha). I have no business relationship with any company whose stock is mentioned in this article.

Editor's Note: This article discusses one or more securities that do not trade on a major U.S. exchange. Please be aware of the risks associated with these stocks.