Out Fox The $treet

AT&T is exploring selling their video gaming unit for a reported $4 billion. The company has $154 billion in net debt so the cash isn't as meaningful as the lost revenues from WBIE. The deal value is an apparent low valuation compared to public gaming stocks such as EA or Take-Two Interactive Software. The stock will suffer from the constant hit to revenues per share while the 6.8% dividend yield is covered from the extra cash. Due to the massive scale of  AT&T  ( T ) following the buyout of Time Warner, the company has looked for non-strategic asset sales to lower massive debt levels. One new target is the video game business from Warner Bros. due to the multi-billion valuation estimate thrown around by analysts. Read the full article on Seeking Alpha.  Disclosure: No position. Please reveal the disclaimer page for more details. 

AT&T took a nearly 10% hit from the recent highs due to negative analyst calls. The stock will benefit from up to $45 billion in share buybacks and debt repayments from 2020 to 2022. My $42.50 price target values the stock at a 2022 EV/EBITDA multiple of only 6.9x. A few negative analyst calls has  AT&T  ( T ) suddenly down $3 from the recent yearly highs near $40. While  my views  on the financial projections of the company are similar to those of these analysts questioning revenue growth potential in entertainment and the new SVOD service, my view on the stock valuation is where the disagreement exists. The stock is cheap on this dip and my price target is still firmly up at $42.50. Read the full article on Seeking Alpha.  Disclosure: Long T. Please review the disclaimer page for more details. 

Stocks to watch on Monday: AT&T (T)  - Not convinced on the financial projections for 2022, but do like these commitments: - no major acquisitions for 3 years. - pay off 100% of acquisition debt from TW (should be more) - 50%+ of post-dividend FCF used to retire stock (would prefer more debt payments). The stock is up nearly 5% on these promises along with financial projections of a 2022 EPS target of $4.50 to $4.80. Naturally, AT&T would surge, if EPS grew up to $1 during 2021 and 2022.  Fitbit (FIT)  - the stock continues to rally as the fitness tracking company slowly moves into the medical device market. Investors only have to compare the valuation of Fitbit to  Garmin (GRMN)  to see where the stock could've headed in just making the current company profitable. The medical device segment should lead to revenue growth and the ability to capture an even higher forward P/S multiple.  Spotify (SPOT)  - the music streaming and ...

Netflix (NFLX) remains on a path to generate record subscriber additions for the year which should send the stock back to previous highs. As the year progresses, the free cash flow burn will become a huge problem as new streaming competition from Disney (DIS) and WarnerMedia (T) comes online.

AT&T trades back near the yearly lows at $29. The stock offers an incredible 6.8% dividend yield. Analyst meeting on Nov. 29 should provide a catalyst for the stock. Market will soon shift focus to $25 billion FCF focus. While my   investment thesis   has constantly slammed on the decisions of   AT&T ( T ) management to shift business away from building the best wireless network, the stock has turned into a bargain due to strong free cash flows. At $29, AT&T offers a nearly 7% dividend yield while recently backing incredibly bullish financials for 2019. The ongoing stock weakness remains an opportunity. Read the full article on Seeking Alpha.  Disclosure: Long T. Please review the disclaimer page for more details.   

The streaming video wars should reach peak competitive levels in 2019. Netflix enters the competition while burning cash at a $3 billion annual rate. The entry of the tech giants leaves Netflix at a balance sheet disadvantage with net debt approaching $10 billion in 2019. The stock is due for another rally in early 2019 for investors to fade. The planed addition of several tech giants along with traditional media players into the direct-to-consumer streaming video segment should expose the biggest weakness of leader  Netflix  ( NFLX ). The problems with developing a leading market position without building up a pristine balance sheet is that competitors can easily attack the company's weakness and ultimately prevent a player like Netflix from achieving the massive cash flows and profits warranting a market valuation of $132 billion. Read the full article on Seeking Alpha.

AT&T launched their rebranded digital ad business. Xandr is only estimated at 3% of the total revenue base. Any success of Xandr provides upside to my previous $40 base case target. The business is off to a troubling start with AppNexus CEO leaving. Last week,   AT&T   ( T ) ushered in the aggressive move into advertising. The wireless giant hopes to more effectively compete in the advertising sector against the tech giants by collecting more data from customers via various video and wireless connections. Unfortunately, the   newly created Xandr   is more likely to resemble the failure of Oath from   Verizon Communications ( VZ ). Read the full article on Seeking Alpha.  Disclosure: Long T. Please read the disclaimer page for more details.   

Based on Nielsen's November estimates, ESPN owned by Disney (DIS) is collapsing faster than expected. The networks of ESPN, ESPN2, and ESPNU all lost over 600K subscribers for November alone.

AT&T reported Q3 numbers that fail to prove out the benefits of the DirecTV deal. The bundling of services has failed to add the most important subscribers. The large debt load makes the synergies in the Time Warner deal a must and the outcome of the DirecTV integration highly questions a positive outcome. In the midst of agreeing to buy Time Warner (NYSE: TWX ), AT&T (NYSE: T ) rushed out  Q3 earnings  a few days early. The biggest issue is that the synergy benefits from DirecTV aren't showing up in the results. Read the full article at Seeking Alpha.  Disclosure: No position. Please review the disclaimer page for more details. 

According to a survey conducted by Bernstein ( via Benzinga), most buy-side analysts expect the deal between AT&T (T) and Time Warner (TWX) to eventually obtain approval. An amazing 84% of the participants in the survey expect AT&T to close the deal, yet Time Warner trades far below the $107.50 offer price.

As reported on Friday, AT&T (T) agreed to purchase Time Warner (TWX) for $107.50 per share. The deal brings together a distribution leader in the form of the wireless network operated by AT&T and the content owned by Time Warner. The deal could be a big victory for the Net Payout Yields model on Covestor where Time Warner has been a long-term holding. The company has long repurchased a large portion of the outstanding stock while paying a decent dividend that recently yielded nearly 2%. The big question is where the stock will trade on Monday with 50% of the value based on whether AT&T breaks the downside collar. As well, the market will likely fear whether the regulators will approve this merger of mega-media giants. Ultimately, a decent price on Monday provides an opportune time to exit a long-term position at the top. Here is hoping to a big pop at the start of trading. Below are links to more detailed reports on my opinions on the merger. WhoTrades Time Warn...

CenturyLink trades down after guiding to a mixed earnings picture. The local telecom continues to generate substantial cash flows that support the large 7.5% dividend yield. Use the weakness to own the telecom with the better yield. For a relatively large, yield-oriented stock, CenturyLink (NYSE: CTL ) trades in a very volatile manner. After  Q1 earnings , the stock is down around 8% despite sporting a large dividend yield. Read the full article on Seeking Alpha.  Disclosure: Long CTL. Please read the disclaimer page for more details.

The quarterly results for Sprint hint at stability with limited signs of moving Forward. . The wireless company continues to trade minimal phone additions for lower service revenue per customer. . The stock isn't touchable until the company actually makes real moves forward. . FQ4 quarterly results  for Sprint (NYSE: S ) were framed by the #MoveForward concept. The wireless company reported some improving metrics in several key categories, but the some doubts exist in whether enough progress was made considering the discounting activity.  Read the full article on Seeking Alpha.   Disclosure: No positions mentioned. Please read the disclaimer page for more details.

T-Mobile continues to lead the domestic wireless industry in net subscriber adds and service revenue growth. The company also leads the sector in operating expense growth. The stock isn't appealing at $40 with minimal ability to generate profits in the highly competitive wireless industry. As a brand and marketing machine, T-Mobile (NASDAQ: TMUS ) has done a tremendous job of turning the business around. For shareholders, the question remains whether the wireless company can make the next step towards profitable growth. Read the full article on Seeking Alpha.  Disclosure: No positions mentioned. Please read the disclaimer page for more details.

AT&T easily slid past analyst EPS estimates that failed to incorporate merger benefits. The wireless giant saw a few negative trends surface that might cap future growth. The stock is likely to plateau at the current level where shareholders collect a 5% dividend yield while waiting for the next catalyst. Q1 results  from AT&T (NYSE: T ) back up my  investment thesis  that the company would continue to push EPS towards $3 on the backs of the DirecTV merger. The theory back when the stock traded around $32 throughout 2014 and most of 2015 was that the stock was extremely cheap with plenty of catalysts. Now with AT&T trading at $38, the valuation equation isn't as clear with user growth slowing and synergies somewhat in place. Read the full article on Seeking Alpha.   Disclosure: No positions mentioned. Please read the disclaimer page for more details.

T-Mobile reported a big Q4 earnings beat. The stock saw limited traction due to the valuation and questions regarding valuation. My recommendation remains neutral on the stock, with the only reason to own it for a short-term momentum play. T-Mobile's (NASDAQ: TMUS )  quarterly results  again provided some industry leading numbers around user and service revenue growth. The aggressive domestic mobile provider even smashed earnings estimates, though the stock got limited traction.  Read the full article on Seeking Alpha.  Disclosure: No positions mentioned. Please read the disclaimer page for more details.

CenturyLink smashed Q4 estimates and increased guidance for 2016. Despite a big rally, the stock still offers a higher dividend yield than the large domestic wireless providers. The recommendation is to continue owning CenturyLink until the yield falls into the range of the telecom giants. The market rejoiced the that  CenturyLink (NYSE: CTL )  reported a  blowout EPS  number for Q4. The telecommunications provider had seen the stock collapse with the market despite a large dividend that was supported by cash flows.  Read the full article on Seeking Alpha.  Disclosure: Long CTL. Please read the disclaimer page for more details.

AT&T easily surpassed Q3 2015 EPS estimates despite massive confusion regarding the revenue numbers. The market continues to not appropriately value the stock based on synergy benefits that will kick in over the next year, whether or not the company achieves the ultimate $2.5. The stock is cheap while paying a 5.6% dividend for investors to wait on synergy benefits. The Q3 results for AT&T (NYSE: T ) were a mass of confusion with the inclusion of DirecTV for only a partial period. The company came out early and pointed out that analysts were miscounting DirecTV revenue while previously changing how commercial satellite subscribers were counted. At the same time, the shift in video and broadband revenues from legacy AT&T to a new segment mingled with DirecTV revenues and expenses made quarterly comparisons difficult. Read the full article on Seeking Alpha. Disclosure: No position mentioned. Please review the dis...

The New Dogs of the Dow had substantial Q3 losses similar to the benchmark Dow. The average stock in the Net Payout Yields based list has a yield of 9.1% to start Q4. Even after a small gain in Q3, Travelers continues to top the list with a 12.1% yield. This article will focus on the quarterly returns and changes in the new "Dogs of the Dow" strategy originally introduced (see The New Dogs Of The Dow - 2015 ) back in January. The goal of the series is to highlight that the old theory of buying the Dow stocks with the highest dividend yields is outdated. The more modern version involves using the Net Payout Yield (NPY) that adds the net stock buyback yield to the dividend yield. This yield more accurately reflects the modern corporate structure that utilizes a large amount of stock buybacks. Read the full article on Seeking Alpha. Disclosure: Long AAPL, CAT, IBM, TRV. Please review the disclosure page for more details....

AT&T has questionable prospects for achieving the targeted DirecTV synergies. Even coming up short on the synergies still leaves the company on track for pro-forma EPS estimates of $3. The stock remains exceptionally cheap and offers a 5.8% dividend yield. Back on September 16, AT&T (NYSE: T ) CFO John Stephens spoke at the Goldman Sachs Communacopia Brokers Conference. The main crux of the conversation with the Goldman Sachs analyst was regarding the integration and synergy benefits of the DirecTV merger. Read the full article on Seeking Alpha. Disclosure: Long T. Please review the disclaimer page for more details.