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Actionable news in T: AT&T Inc,

Why I Am Buying AT&T

Summary

Competitors are less aggressive, creating an opportunity to focus on cross-selling DirecTV customers.

T's stock price is down while earnings estimates are up.

Forward valuation is attractive and the dividend creates a price floor.

I have been following AT&T (NYSE:T) for some time. For a long time, I was very skeptical about T's potential, labeling it only suitable for income investors. Later, the threat of industry and non-industry completion created worry. However, lately I have come to the conclusion that T is a worthy addition to a total return portfolio.

Competitors Under Control

In the past few weeks we have seen industry competitors signal there will be no price wars or margin-ruining competition (in the near term). Sprint (NYSE:S) was the first to throw in the towel. After falling behind T-Mobile (NASDAQ:TMUS) in Q2 2015 in market share (57 million customers compared to 59 million for TMUS), S announced on October 1 that it was slashing costs by $2.5 million over the next six months. S also said it would not participate in the Q1 2016 spectrum auction and will announce job cuts in the near future. Taken individually or together, these moves clearly signal S is conserving cash and...


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