You Can Definitely Hear Now

Written by GSCR Staff   
Tuesday, 20 May 2014 07:32

Last week we commented on the old market/macroeconomic cliché about GM and the U.S.  We will keep it going with an marketing campaign slogan that reached its heights a few years back, but has been scaled back a bit to avoid being overdone.

 

Of course we are talking about the infamous slogan from Verizon Communications, Inc. (NYSE – VZ - $49.15), “Can you hear me now?  In yesterday’s Goldman Guide we mentioned the buy-out of DirecTV (NASDAQ – DTV) by AT&T (NYSE – T) as maybe a bad thing, as it seems AT & T is having difficulty generating organic growth.  Even with that said, the telecom sector enjoyed a moderate bounce yesterday, including VZ.

 

In addition to being the largest 4G service provider in the U.S., Verizon has grown its international presence with enterprise solutions in IP and networks, and has an aggressive growth strategy in developing products and solutions outside the current realm of consumer wireless applications.  A few examples are partnerships with some automotive manufacturers in state-of-the-art communication systems in new cars, and data service infrastructure systems in healthcare.

 

VZ looks very attractive from a growth/earnings and growth/price perspective with a forward 12-month P/E ratio under 13 with 6.7% consensus estimate growth for 2014, and a 5-year PEG ratio of just over 2.  Additionally, operating and gross margins of 27% and 63% are comfortably above industry norms in the sector of 16% and 55% respectively.  Finally, the dividend yield of 4% indicates there is some value and security to owning VZ.

 

VZ is a very bullish stock when viewing the 50-day Daily Moving Average.  Additionally, the put-call ratio is bullish as well at the $55-$60 strike price in July, August, and September.  We think this stock maybe one of the few that run this summer and the $55 range is probably realistic.

 

Have a great day!

 

Disclosure: Goldman Small Cap Research analysts are neither long nor short these shares but may elect to purchase the stock within the next 48 hours.

Disclaimer:

This Market Monitor blog was prepared for informational purposes only. Goldman Small Cap Research, (a division of Two Triangle Consulting Group, LLC) produces research via two formats: Goldman Select Research, which typically highlights small cap companies, and Goldman Opportunity Research, which features micro cap companies in a sponsored research format. Thus, the Select product reflects the Firm’s internally generated stock ideas while the Opportunity product reflects sponsored research reports. 

Goldman Small Cap Research is not affiliated in any way with Goldman Sachs & Co.

It is important to note that while we may track performance separately, we utilize the same coverage criteria in determining coverage of all stocks in both research formats. Please view the company’s individual disclosures for each engagement, which can be found in each company-specific report. All information contained in this blog, newsletter and in our reports were provided by the Companies or generated from our own due diligence. Our analysts are responsible only to the public, and are paid in advance to eliminate pecuniary interests, retain editorial control, and ensure independence. Analysts are compensated on a per report basis and not on the basis of his/her recommendations. 

The information used and statements of fact made have been obtained from sources considered reliable but we neither guarantee nor represent the completeness or accuracy. Goldman Small Cap Research did not make an independent investigation or inquiry as to the accuracy of any information provided by the Company, or other firms. Goldman Small Cap Research relied solely upon information provided by the Company through its filings, press releases, presentations, and through its own internal due diligence for accuracy and completeness. Such information and the opinions expressed are subject to change without notice. A Goldman Small Cap Research blog, report, note, or newsletter is not intended as an offering, recommendation, or a solicitation of an offer to buy or sell the securities mentioned or discussed.

This blog does not take into account the investment objectives, financial situation, or particular needs of any particular person. This blog does not provide all information material to an investor’s decision about whether or not to make any investment. Any discussion of risks in this presentation is not a disclosure of all risks or a complete discussion of the risks mentioned. Neither Goldman Small Cap Research, nor its parent, is registered as a securities broker-dealer or an investment adviser with FINRA or with any state securities regulatory authority.

ALL INFORMATION IN THIS BLOG, REPORT OR NEWSLETTER IS PROVIDED “AS IS” WITHOUT WARRANTIES, EXPRESSED OR IMPLIED, OR REPRESENTATIONS OF ANY KIND. TO THE FULLEST EXTENT PERMISSIBLE UNDER APPLICABLE LAW, TWO TRIANGLE CONSULTING GROUP, LLC WILL NOT BE LIABLE FOR THE QUALITY, ACCURACY, COMPLETENESS, RELIABILITY OR TIMELINESS OF THIS   INFORMATION, OR FOR ANY DIRECT, INDIRECT, CONSEQUENTIAL, INCIDENTAL, SPECIAL OR PUNITIVE DAMAGES THAT MAY ARISE OUT OF THE USE OF THIS INFORMATION BY YOU OR ANYONE ELSE (INCLUDING, BUT NOT LIMITED TO, LOST PROFITS, LOSS OF OPPORTUNITIES, TRADING LOSSES, AND DAMAGES THAT MAY RESULT FROM ANY INACCURACY OR INCOMPLETENESS OF THIS INFORMATION). TO THE FULLEST EXTENT PERMITTED BY LAW, TWO TRIANGLE CONSULTING GROUP, LLC WILL NOT BE LIABLE TO YOU OR ANYONE ELSE UNDER ANY TORT, CONTRACT, NEGLIGENCE, STRICT LIABILITY, PRODUCTS LIABILITY, OR OTHER THEORY WITH RESPECT TO THIS PRESENTATION OF INFORMATION.

For more information, visit our Disclaimer: www.goldmanresearch.com

Add comment
  • No comments found