"Despite a host of near-term issues, Sprint (NYSE: S) has many of the attributes we look for in a turnaround stock: a solid core business, well-known brands, new management, manageable cash flow and even an activist shareholder to stir things up," notes George Putnam, III.
In his industry-leading The Turnaround Letter, the advisor looks expert at the firm, which he notes traces it roots back to the Brown Telephone Company in Kansas in 1899.
"When the long-distance market was opened to competition in the early 1980's, Sprint moved in aggressively. In early 2005, Sprint acquired Nextel, which had become a major wireless competitor with its innovative 'push to talk' technology that combines elements of the walkie talkie and the cell phone.
"The $35 billion transaction was supposed to vault Sprint into the leadership of the wireless market. Unfortunately, the combined company stumbled. Difficulty in integrating the two companies led to poor customer service which drove some consumers away.
"Investors, who had initially applauded the Nextel acquisition, pushing the stock above $27 in mid-2005, became concerned, and the stock has been in a steady decline for the past two-and-a-half years. And the company's poor earnings report on February 28 further discouraged Wall Street.
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