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The shares of AT&T (T), first discussed here on February 11, 2009 at a price of $26, continue to meander. In fact, the stock has formed a modest downtrend that's raised a caution flag. Even so, the calculation is to stick with the trade on the thesis that T remains well-positioned to remain a force in the Internet/communications revolution in the years ahead. Look for T's revenue to grow about 2-3% in 2010, led by an impressive increase in cell phone customers (which numbered about 85 million as of January 2010) and wireless data service customers.
Further, AT&T's successful (but company subsidized) iPhone providership has added more than 14 million iPhone customers as of January 1, 2010 -- a major reason why wireless revenue growth should exceed 10% in 2010; further, AT&T's 3G smartphone portfolio also is impressive. Finally, company-wide efficiency improvements and a $1.68 annual dividend round-out the positive story.
The First Call FY2010/FY2011 EPS estimates for T are $2.28 to $2.45.
Technically, AT&T's stock is trying investors' patience with its recent downtrend, but the calculation here is that support at/near $24 should hold.
2010 Outlook: I view AT&T as a long-term play, but if investors are looking to sell T within the year, it's probably best to take your profits after it rises to $28-29, if it fails to rise above $30.
Stock Analysis: I consider AT&T Corp to be a moderate-risk stock. If an investor has already purchased the company's shares, I'd hold them. If not, I'd consider buying a 25% position in T now; then buy another 25% in one month, if U.S. and global economic conditions don't worsen substantially. Under any circumstance, I wouldn't buy more than 50% of my T position before August 2010 and I'd put a sell/stop loss at: $18.
Disclosure: Lazzaro has no positions in stocks, but does own shares in two Pimco Bond Funds: PHDAX and PYMAX.
The First Call FY2010/FY2011 EPS estimates for T are $2.28 to $2.45.
Technically, AT&T's stock is trying investors' patience with its recent downtrend, but the calculation here is that support at/near $24 should hold.
2010 Outlook: I view AT&T as a long-term play, but if investors are looking to sell T within the year, it's probably best to take your profits after it rises to $28-29, if it fails to rise above $30.
Stock Analysis: I consider AT&T Corp to be a moderate-risk stock. If an investor has already purchased the company's shares, I'd hold them. If not, I'd consider buying a 25% position in T now; then buy another 25% in one month, if U.S. and global economic conditions don't worsen substantially. Under any circumstance, I wouldn't buy more than 50% of my T position before August 2010 and I'd put a sell/stop loss at: $18.
Disclosure: Lazzaro has no positions in stocks, but does own shares in two Pimco Bond Funds: PHDAX and PYMAX.
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