AT&T And Comcast: These Discounts Won't Last Long

Oct. 20, 2022 10:41 AM ETComcast Corporation (CMCSA) Stock, T Stock, , , 8 Comments

Summary

  • The Communication Services Sector represented by the Communication Services Select Sector SPDR Fund 'XLC' is the 2nd most attractive sector currently.
  • Two leading stocks in the sector, AT&T and Comcast, are at their secular bottom valuations.
  • Both are equivalent to a 10%+ equity bond with coupon growth built-in if you consider their perpetual growth and Buffett’s 10x Pretax Rule.
  • These valuation discounts are too large to sustain in my opinion. A range of catalysts (stronger free cash flow, stock buybacks, et al) could trigger a rebound and close the valuation discounts.
  • AT&T is the higher-risk and higher-return play here compared to Comcast.
  • This idea was discussed in more depth with members of my private investing community, Envision Early Retirement. Learn More »

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The investment thesis

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This article was written by

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Envision Research, aka Lucas Ma, has over 20+ years of investment experience and holds a Masters with in Quantitative Investment and a PhD in Mechanical Engineering with a focus on renewable energy, both from Stanford University. He also has 30+ years of hands-on experience in high-tech R&D and consulting, housing sector, credit sector, and actual portfolio management.

He leads the investing group Envision Early Retirement along with Sensor Unlimited where they offer proven solutions to generate both high income and high growth with isolated risks through dynamic asset allocation. Features include: two model portfolios - one for short-term survival/withdrawal and one for aggressive long-term growth, direct access via chat to discuss ideas, monthly updates on all holdings, tax discussions, and ticker critiques by request.

Analyst’s Disclosure:I/we have a beneficial long position in the shares of VZ either through stock ownership, options, or other derivatives. 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.

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