Three analysts have increased their earnings estimates for this telecom company in the last 30 days.
Sprint Corp. (S)
From Top Stocks Under $10
Buy a 5% position in Sprint Corp. (S, Rated “C-”) at $8.50 or better, GTC.
Sprint is a beaten-down, low-priced telecom stock that has washed up on our shores looking for a second life. And given that some very big things are happening at Sprint, both in terms of the company and its stock price, I can’t ignore this opportunity for you to add its shares.
We all have cell phones, smartphones, tablets, and other devices, and they rely on companies like Sprint to communicate. Sprint has lagged its peers historically given some concerns about spending, debt, and competition. But it’s now turning the corner.
First, in its last quarter, Sprint posted positive earnings for the first time in three years. Second, its sales grew, and thanks to its cost-cutting initiatives, its operating income reached 10-year highs.
These are great numbers, and it shows in this key statistics section of our Weiss Ratings report for Sprint. You’ll see the “dots” are heavily biased to the right side. That means the company is operating at its fastest and strongest pace in two years by several metrics.
And third, its last earnings report caused the stock to jump 11% in a single day, almost reaching $9. It has been consolidating those gains since then thanks to some market weakness. But that makes this a great time to pick up Sprint for a cheaper price.
The last analyst to rate the stock was at Wells Fargo, and she thinks it’s an “outperform”. Her target is $11 over the next 12 months. But even if you want to be more conservative, $10 looks very reasonable.
And that’s not all Sprint has going for it. Japan’s Softbank is the company’s main shareholder, with an 84% interest. It’s currently seeking either a buyer or a merger partner for Sprint, and a deal could be announced at any time with one or more companies.
T-Mobile, Charter Communications, and a few others are the most probable suitors. There is obvious value in Sprint’s 58 million customers, as well as its wireless network. Both could prove valuable as a bolt-on addition to a cable operator looking to compete with AT&T and others. So, go ahead and add Sprint to your holdings.
Mandeep Rai, Top Stocks Under $10, Weiss Research, Inc., www.moneyandmarkets.com/services/trading-services/top-stocks-under-10, issues@e.moneyandmarkets.com; 1-800-291-8545, August 15, 2017