Reiterating: AT&T - Nothing phases 'Ma Bell'

Posted Jul 9th 2009 6:00PM by Joseph Lazzaro
Filed under: AT and T (T), Stocks to Buy

I'm Reiterating my Buy rating for AT&T (NYSE: T), first recommended on February 11, 2009 when T was priced $24.56.

AT&T held support at $20 and although the market has been peppered with renewed concerns about a 'late' U.S. economic recovery (and an 'even later' global economic recovery), AT&T shares have held their own. And... this was after AT&T's shares were essentially unmoved by the greatest financial market and stock market tumult since the 1930s.

A sizable, dependable dividend also limits the downside. True, telecom sector revenue could lag the broader market by 6-9 months, but that doesn't change the defensive-plus-potential-upside story: and that combo is a whole lot in this investment and economic climate. The First Call FY2009/FY2010 EPS estimates for T are $2.07/$2.22.

Stock Analysis: AT&T is a low-risk stock. If you already own AT&T shares, consider adding to your position by 25%. For new investors, consider buying a 50% position in AT&T now; then buy another 25% in four months, if U.S. economic conditions don't worsen substantially. Under any circumstance, don't buy more than 75% of your AT&T position before October 2009. Sell/Stop Loss if you were to buy shares in this company: $18.

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Disclosure: Lazzaro has no positions in stocks, but does own shares in two Pimco Bond Funds: PHDAX and PYMAX.

Tags: att, ma bell, MaBell, telecoms

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Reader Comments (Page 1 of 1)

7-21-2009 @ 9:22AM

Mike Whalley said...

I heard that AT&T is planning to tie-up with RCom, the Indian telecom giant. Why would it do that? RCom is
facing so many controversies regarding discrepancy in the books of accounts and is undergoing audit investigation from the indian Telecom regulatory body (TRAI).The discrepancy could be as high as $1400 million. So why would AT&T want to tie-up with a stagnant player like RCom?