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Bonds Are a 'Safe' Investment: A Big Lie Gets Even BiggerIt's a 'triple play' of sorts that makes AT&T so inviting: substantial landline telephone subscribers & assets, mobile phone service and a ramping high speed/broadband Internet business. By virtue of its acquisition of BellSouth, AT&T is the largest landline carrier in the U.S. True, many technologies compete with old-generation landline phones, but the important point is that landline services is not going away, and will remain a valuable asset: try using your cell phone during an extended electric power failure.
Concerning T's wireless business, analysts expect 8%-10% revenue growth for 2007-2009, with adequate margins. Further, look for the company's broadband business to contribute significantly to revenue in the years ahead, as well. Also, AT&T has done a good job lowering operating costs, and a strong balance sheet and a 3.4% yield doesn't hurt, either.
Technically, AT&T's chart looks good. True, the stock has recently dipped below its 50-day moving average, but the upward trend remains intact and the stock recently cleared major resistance at $40. Further, the stock has been above its 200-day moving average - - the toughest average to break - - for about 2 years.
Stock Analysis: AT&T is a low-risk stock. If you don't already own a utilities stock as a defensive play, consider adding T to your portfolio. Investors with an investment horizon longer than one year should be rewarded fromAT&T's shares. Sell / Stop Loss: $25.
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