That's a pretty difficult question to answer but, looking back
at Ma Bell's breakup in 1984, all 7 of the Regional Bells have
been much better investments than T itself.
Currently, the majority surmision is that T is going to have a much
more expensive and technically difficult time putting its local
networks back together than it's going to be for the local providers
to get into long distance: note that all of the Bells are already
back into long distance outside of their own service areas and that
GTE, which was not bound by Judge Greene's consent decree in 1984,
is also offering long distance and is, for all intents and purposes,
the most diversified of all the telcos.
I rolled over all my telcos into SBC and PAC (because of the merger
discount) and NYN (because of the possible merger with BEL) because
I though they were the biggest bargains at that time. PAC was 25 at
that time and NYN was 33 and, especially with the DRIPs, they've
turned out to be excellent investments. I recently sold PAC at 41
and SBC at 57 but am still holding NYN because I think it still looks
cheap under 50...but I'm looking to sell that one too.
Keep in mind that if the FED does raise interest rates, that usually
causes the utilities (telco, gas, electrics) to fall because of the
high debt structure they all carry.
Personally I think T is a bad investment at this time and I also don't
like GTE because I think it's a poorly run company from a customer
service and employee relations standpoint. As a GTE customer, though,
that is just my personal opinion but is one that I hear echoed by a
lot of folks. Many of us think that when true competition comes in,
GTE is one of the telcos that is going to lose a lot of customers.
As I say, though, the telco arena is in flux right now and, opinions
aside, it's anybody's guess as to the winners in the final outcome;
if you do intend to hold T long, it might not be a bad idea to do
something like FLAG Investors and set up a "Basket" of telephone
company stocks...that way, if you lose out on one or two picks, the
other picks will hopefully shore up your portfolio.
My favorite "gamble" for the near-to-medium term is SBC but, right
now, I wouldn't even buy that one back. The only stock I feel comfortable staying with right now is my "cash" account called WalMart
as I feel that's one that's still fairly valued. However, I wouldn't
buy any more since it's way up over my original cost basis. |
