OT re WCOM:
1. Sooner or later, the market will stop treating them as a long-distance phone company. WCOM is investing nothing (not one penny) in voice LD, but is using the billions in cash flow from that mature business, to build an unmatched global infrastructure in data/wireless/international/internet, mostly for corporate clients.
2. The FON merger will go through, sooner or later, with WCOM keeping the wireless assets, which are what they really need.
3. The above are the two reasons the stock is down, and they are time-limited.
4. EPS growth will average 25-30% for the next 5 years. 12-month forward PE is 40/1.89= 21. PEG<1
5. Comparing them with T, they are beating them in every single one of their competing businesses.
6. As a defensive play, if the Fed screws up and we get a hard landing, I figure telecom services won't get cut much compared to software and hardware upgrades. So, WCOM will be less hurt than, say, CSCO or INTC.
7. The stock has bounced repeatedly at around 40. I think all the bad news is in the stock. |
