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

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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.

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Last updated: February 09, 2010: 03:35 PM

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