The Slow Burn of Mega Telecom StocksOver the past year, Verizon and AT&T, two of the largest telecommunications giants, have seen their stock prices go lower... and lower... and lower.
This decline has been notable, catching the attention of not only markets in general, but the telecom sector as a whole and bellwether dividend investors.
The downward trend is especially notable when you consider the fundamental nature of what these businesses provide: connectivity. This, in a way, is a required resource at this point in time, like energy.
So what's happening to two this stocks and why are they on my watchlist? Why am I writing about them now?
First, let's me say that their dividend yield has my attention. Verizon and AT&T have maintained high dividend yields, now exceeding 6% and in some cases going about 7%. This is rather tasty looking. I do not have a position, at this time, but more research is surely warranted. While the yield is tempting, I must figure out how sustainable it is.
High interest rates and high debt rates do offer a tight outlook to Verizon and AT&T. Additionally, the competitive landscape in the telecommunications sector has forced both companies to spend heavily on marketing and promotional activities to retain and grow their customer base. The issue of high debt is compounded by the environment of rising interest rates, which increases the cost of servicing this debt. This combination of high debt levels and increasing interest costs squeezes profitability and can dampen investor sentiment, contributing to the downward pressure on stock prices.
As this post nears its ends, here are my key takeaways for readers:
1. Telecom sector is down, badly.
2. There might be opportunity if you look deep enough.
3. Dividend yield is one thing I'll be researching for further for more income.
4. High debt levels are worry for stocks like AT&T and Verizon, they must articulate a plan in this regard.
5. If anyone in the comments below want to share other dividend stocks with me (over 6% please, let me know)
Thanks for reading!
SOBA trade ideas
T AT&T Options Ahead of EarningsIf you haven`t sold the double top on AT&T:
nor bought the dip:
Then analyzing the options chain and the chart patterns of T AT&T prior to the earnings report this week,
I would consider purchasing the 17usd strike price at the money Calls with
an expiration date of 2024-1-26,
for a premium of approximately $0.43.
Looking at the chart, I think T is heading to a triple top, or a Head and Shoulders chart pattern.
If these options prove to be profitable prior to the earnings release, I would sell at least half of them.
AT&T: Dark Cloud Cover at Resistance ZoneAT&T has formed a Dark Cloud Cover after being rejected from the upperbound of the Resistance Zone and is now trading below the 200SMA and 800EMA with Hidden Bearish Divergence forming on the MACD. If it plays out, I think we could see AT&T make its way down towards $13.20
Trade Plan for ATT($T)The purpose of this is to document and track my trade plan for ATT. This is not financial advice and these are not plays.
Nomenclature: Accumulation to me is the acquisition of "free" shares that are paid for by profits on trades. I.E. If I buy 100 shares and sell 80 at 20% profit, the remaining 20 are "free" since my initial entry cost was recovered. If I do this 5 times, I have 100 "free" shares.
The Rules (Cause trade plans need rules.):
1. Upon entering an option position, a GTC order to sell at 20% profit (after fees) goes in immediately. Runners will only be a thing when 5+ contracts are purchased.
2. Stop losses are determined but do not go on the tape.
Indicators:
13/48EMA Daily
50/200SMA Daily
30SMA Weekly
SRChannels
Volume Profile
RSI
DMI
MACD
Stupid Willy
Cumulative Delta Volume.
Fibonacci retracements, extensions, channels with proprietary levels.
Trading methods:
Weinstein
Wyckoff
The idea to trade this popped on the radar when I was notified by a co-worker that ATT dropped to a ten year low. After looking at the chart, I saw a potential opportunity to utilize what I learned since the Gamestop sneeze and I do not mind holding ATT long term should a trade go horribly against me.
The goal initially was to swing trade an overreaction by the market and snag some dividends before exiting with a small profit. The Weinstein SMA(Burgandy MA Line) indicates an accumulation phase beginning so there is a possibility of scalping more alpha.
Comments in Orange are explicitly for Weinstein and Wyckoff commentary.
Random drawings will be fib levels and other artifacts from indicators that are off to clean up the publish.
AT&T - Possible upside to 200 ema Idea Stream for AT&T
Wait for confirmation of the move bullish.
$15.46 is such a pivotal price point; it can play as resistance or as a prior support from June 23- 26. That's why we wait for confirmation of the move. Premarket can help determine consolidation, momemtum, etc
Strategy - If, on October 25th it proves bullish, then:
BUY 15.50 call 11/3 0.25 or better
Target #1 Target #1 15.90 sell @ 0.47 = 88% win
Target #2 16.09 sell @ 0.57 = 128% win
Why?
RSI is uptrending
Earnings is behid us
Retest off the 89
Bollinger Bands are opening
MACD is uptrending
Great Volume since Earnings
**Let's see what happens**
This is my opinion and not trading advice. Seek professional advice elsewhere. These are only my ideas.
AT&T This +10% jump is a strong sell opportunity.AT&T almost achieved a +10% rise today, forming a Buy Cross on the 1day MACD.
Though technically bullish, the last two 1day MACD Buy Cross formations priced market tops and were excellent sell opportunities.
Sell now and target 15.00 (Fibonacci 0.5).
Follow us, like the idea and leave a comment below!!
AT&T retreate downwardsAT&T retreate downwards
This chart shows the weekly candle chart of AT&T company's stocks over the past six months. The graph overlays the golden section above the low point of July this year. As shown in the figure, the highest point of AT&T company's stock last week just hit the bottom of the graph, which is 1.382 on the golden section, and then retreated downwards! The recent strong support for AT&T company's stock below is the 0.618 level of the golden section above the bottom in the figure. In the future, this position can be used as the watershed to determine its strength!
AT&T, continue bearish trendPrice slump since ATH 33.13 (-55%) at 2016
Has to be intact with the blue uptrend line.
Currently price trade blow Hull MA which not a good sign.
Disclaimer: Mentioned stocks are solely based on own opinions for education and/or discussion purpose only. There's no buy and/or sell recommendation. Trading involve financial risk on your own. The author shall not be responsible for any losses or lost profits resulting from investment decisions based on the use of the information contained herein.
$T Bearish Parallel Trend Line to Bullish Reversal NYSE:T (AT&T Inc.) has exhibited a bearish parallel trend line, indicating a sustained downtrend. However, recent price action suggests the potential for a bullish reversal. It's noteworthy that NYSE:T pays dividends, adding an attractive income component for investors. Considering its dividend history and the possible shift in sentiment, NYSE:T could be a compelling choice for long-term investors seeking growth and income opportunities.
T AT&T Options Ahead of EarningsIf you haven`t sold T here:
Then analyzing the options chain and the chart patterns ofT AT&T prior to the earnings report this week,
I would consider purchasing the 15usd strike price Calls with
an expiration date of 2023-11-17,
for a premium of approximately $0.79.
If these options prove to be profitable prior to the earnings release, I would sell at least half of them.
Looking forward to read your opinion about it.
AT&T's Two-Year Restructuring Journey: A Focus on 5G and ...AT&T's Two-Year Restructuring Journey: A Focus on 5G and Fiber Networks
Over the last couple of years, AT&T has actively undertaken a restructuring process by divesting its non-core assets and initiating spin-offs of DirecTV and WarnerMedia. The company's primary goal has been to realign its focus and prioritize the enhancement of its 5G and fiber networks, positioning itself for a more competitive stance in the telecommunications industry.
A significant milestone in this strategic plan was the successful merger between WarnerMedia and Discovery, resulting in the formation of Warner Bros. Discovery (WBD 0.16%). The transaction, completed on April 8, 2022, allowed AT&T investors to receive 0.241917 shares of WBD for each AT&T share they held. However, since both stocks began trading separately on April 11, both AT&T's and WBD's stock prices have experienced declines, with AT&T's stock falling by 25% and WBD's stock dropping by 47%.
Initially, the "new" AT&T impressed investors with robust growth in its wireless business, gaining nearly 2.9 million postpaid phone subscribers in 2022 and expanding its fiber networks. However, this growth was dampened by underperformance in its business wireline segment and the loss of non-fiber broadband customers. Consequently, AT&T revised its initial projection of $20 billion in free cash flow (FCF) for 2023 down to $16 billion. In the first quarter of 2023, the company generated only $1 billion in FCF due to increased expenses related to 5G and fiber.
This sluggish FCF growth has raised concerns about AT&T's dividends and expansion plans, causing investors to seek more conservative income investments amidst the prospect of rising interest rates. Despite seemingly attractive valuations at six times forward earnings and an impressive forward yield of 8.3%, there are three other red flags that could potentially limit its short-term gains.
One such concern is the possibility of Amazon's entry into the wireless market. Reports in early June suggested that Amazon might introduce wireless plans at an exceptionally low price, even possibly free for its Prime members. While Amazon later refuted these rumors, the idea of their potential collaboration with one of AT&T's primary competitors raised concerns, especially amidst an ongoing price war among major U.S. carriers.
Furthermore, AT&T's CFO Pascal Desroches cautioned that the company might fall short of expectations for adding postpaid phone subscribers in the second quarter, casting doubts on its ability to reach the targeted $16 billion in FCF for the year. Although AT&T's performance still surpassed Verizon, doubts are growing about its FCF prospects.
Moreover, AT&T, along with Verizon, faced scrutiny over a Wall Street Journal report alleging exposure of workers and the environment to toxic lead-sheathed copper cables. The potential cost of replacing these legacy cables could be significant, and though AT&T claims they constitute only a small portion of their network, ongoing coverage of the issue may impact the company's brand reputation and stock price.
Looking ahead, AT&T's second-quarter earnings report, scheduled for release on July 26, is expected to reveal weaker-than-expected wireless numbers and may provide updates on the lead-covered copper cable issue. Demonstrating higher-than-anticipated FCF growth could offset some negative sentiment, but in the current uncertain market, AT&T's stock may continue to trade at a discount until additional positive indicators emerge.