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11 Best Telecom Stocks to Invest In

In this article, we discuss 11 best telecom stocks to invest in. If you want to see more stocks in this selection, check out 5 Best Telecom Stocks to Invest in

The technology, media, and telecommunications markets have been rattled this year by the rampant uncertainty in the global economy. However, instability in the economic environment has not hindered growth and innovation in this space. Multiple value-adding and disruption opportunities are stemming as the world undergoes a digital transformation, which has been happening for more than a decade and quickened during the pandemic. 

The world is going through a technology, media, and telecommunications evolution, as geopolitical and environmental pressures, recessionary crisis, and the global economy’s consistent instability highlights the need for enterprises to adopt cost-efficient business models. The global telecom market climbed from $2,642.14 billion in 2021 to $2,879.75 billion in 2022, indicating a compound annual growth rate (CAGR) of 9.0%. It is forecasted to reach $3,629.04 billion in 2026 at a CAGR of 6.0%. Asia Pacific was the largest region in the telecom market in 2021, with North America being the second largest region. 

Some of the top trends that will shape the future of telecoms include 5G technology, the internet of things (IoT), artificial intelligence, cloud computing, cybersecurity, and blockchains. The best stocks to consider for exposure to the telecom sector include T-Mobile US, Inc. (NASDAQ:TMUS), Comcast Corporation (NASDAQ:CMCSA), and AT&T Inc. (NYSE:T). Given that iShares U.S. Telecommunications ETF lost more than 31% year-to-date and underperformed the market, this may be a good time to buy telecom stocks at a large discount.

Our Methodology 

We selected the following telecom stocks based on positive analyst coverage, strong business fundamentals, and market visibility. We have assessed the hedge fund sentiment from Insider Monkey’s database of 920 elite hedge funds tracked as of the end of the third quarter of 2022. The list is arranged according to the number of hedge fund holders in each firm. 

Best Telecom Stocks To Buy Right Now

11. BCE Inc. (NYSE:BCE)

Number of Hedge Fund Holders: 10

BCE Inc. (NYSE:BCE) was founded in 1880 and is headquartered in Verdun, Canada. It is a telecommunications and media company that provides wireless, wireline, internet, and television services to residential, business, and wholesale customers in Canada. On December 13, BCE Inc. (NYSE:BCE) declared C$0.92 per share quarterly dividend, in line with previous. The dividend is payable on January 16, 2023 to shareholders of record on December 15. 

On December 20, National Bank analyst Adam Shine maintained an Outperform rating on BCE Inc. (NYSE:BCE) but lowered the firm’s price target on the shares to C$66 from C$68. 

According to Insider Monkey’s third quarter database, 10 hedge funds were bullish on BCE Inc. (NYSE:BCE), compared to 12 funds in the prior quarter. Jim Simons’ Renaissance Technologies is the largest stakeholder of the company, with 452,598 shares worth $19 million. 

In addition to T-Mobile US, Inc. (NASDAQ:TMUS), Comcast Corporation (NASDAQ:CMCSA), and AT&T Inc. (NYSE:T), BCE Inc. (NYSE:BCE) is one of the best telecom stocks to invest in. 

10. Globalstar, Inc. (NYSE:GSAT)

Number of Hedge Fund Holders: 13

Globalstar, Inc. (NYSE:GSAT) is a Louisiana-based company that provides mobile satellite services worldwide. The company offers duplex two-way voice and data products for remote business continuity, recreational usage, safety, and emergency preparedness and response. On December 7, Globalstar, Inc. (NYSE:GSAT) announced a commercial agreement with Wiagro, an Agtech start up from Argentina. The company is supplying Wiagro with 2,500 ST100 satellite modem transmitters for their Smart Silobag, and the partnership is effective immediately with completion of deployment through the end of 2024. 

On November 7, B. Riley analyst Mike Crawford raised the price target on Globalstar, Inc. (NYSE:GSAT) to $3.75 from $3.25 and kept a Buy rating on the shares. The new target reflects the higher value of Globalstar, Inc. (NYSE:GSAT)’s MSS business, which is now anchored by Apple Inc. (NASDAQ:AAPL) for beyond the next decade, the analyst told investors in a research note.

According to Insider Monkey’s data, 13 hedge funds were bullish on Globalstar, Inc. (NYSE:GSAT) at the end of Q3 2022, compared to 11 funds in the prior quarter. Jason Mudrick’s Mudrick Capital Management is the largest stakeholder of the company, with 86.8 million shares worth $138 million. 

9. TELUS Corporation (NYSE:TU)

Number of Hedge Fund Holders: 19

TELUS Corporation (NYSE:TU) is headquartered in Vancouver, Canada, and the company provides a range of telecommunications and information technology products and services in Canada. It operates through Technology Solutions and Digitally-Led Customer Experiences segments. It is one of the best telecom stocks to invest in. On November 4, TELUS Corporation (NYSE:TU) declared a C$0.3511 per share quarterly dividend, a 3.7% increase from its prior dividend of C$0.3386. The dividend is payable on January 3, 2023 to shareholders of record on December 9. 

On December 20, National Bank analyst Adam Shine reiterated an Outperform rating on TELUS Corporation (NYSE:TU) but lowered the firm’s price target on the shares to C$34 from C$35. 

According to Insider Monkey’s data, 19 hedge funds were long TELUS Corporation (NYSE:TU) at the end of the third quarter of 2022, compared to 15 funds in the prior quarter. Jim Simons’ Renaissance Technologies is the largest stakeholder of the company, with 3.4 million shares worth $68 million. 

8. Iridium Communications Inc. (NASDAQ:IRDM)

Number of Hedge Fund Holders: 25

Iridium Communications Inc. (NASDAQ:IRDM) is a Virginia-based company that provides mobile voice and data communications services and products to businesses, the United States and international governments, non-governmental organizations, and consumers worldwide. On December 8, Iridium Communications Inc. (NASDAQ:IRDM) declared a $0.13 per share quarterly dividend. The dividend is payable on March 30, 2023 to shareholders of record March 15. 

On October 21, Raymond James analyst Ric Prentiss raised the price target on Iridium Communications Inc. (NASDAQ:IRDM) to $60 from $51 and kept a Strong Buy rating on the shares. Iridium Communications Inc. (NASDAQ:IRDM) posted a beat for Q3 and lifted its 2022 guidance slightly, further emphasizing the solidity of this recurring revenue business model through different economic outlooks, the analyst told investors in a research note.

According to Insider Monkey’s data, 25 hedge funds were bullish on Iridium Communications Inc. (NASDAQ:IRDM) at the end of Q3 2022, compared to 20 funds in the prior quarter. Kevin Kuebler and Ming Lam’s Silver Heights Capital Management is the largest stakeholder of the company, with 2.5 million shares worth $110 million. 

Baron Funds made the following comment about Iridium Communications Inc. (NASDAQ:IRDM) in its Q3 2022 investor letter:

“Iridium Communications Inc. (NASDAQ:IRDM) is capitalizing on the approximately $3 billion it invested over several years to build and launch its current satellite network. It is now entering what it has termed a “cap-ex holiday” that should result in high free-cash-flow conversion. The company spent approximately $400 million on capital expenditures annually only a few years ago, but we expect this spend to decline to approximately $40 million in the coming years. It is an indication that the company’s substantial lead should persist as the capital investment and timeline to launch competitive products is too great. We expect Iridium to capitalize on the growing need for its high-speed L-Band network over this time.

Shares of Iridium Communications Inc., a leading satellite-based mobile voice and data communications services vendor, rose on increased expectations for smartphone compatibility after it announced a related development agreement and other market participants announced similar capabilities. In addition, Iridium reported record quarterly results showing an acceleration of revenue growth with strong profitability. Lastly, growth initiatives continue to mature including Aireon, an award from the Space Development Agency, and increasing speeds for its Certus offering.”

7. Lumen Technologies, Inc. (NYSE:LUMN)

Number of Hedge Fund Holders: 34

Lumen Technologies, Inc. (NYSE:LUMN) is a Louisiana-based technology and communications company, offering integrated products and services under the Lumen, Quantum Fiber, and CenturyLink brands to enterprise and residential customers in the United States and internationally. Lumen Technologies, Inc. (NYSE:LUMN) is one of the best telecom stocks to invest in. 

On December 6, Lumen Technologies, Inc. (NYSE:LUMN) announced an investment to expand its intercity network across the United States. The telecommunications company is planning to deploy another 6 million fiber miles, which will bring its U.S. intercity investment to nearly 12 million fiber miles. Deployment is expected to take place by 2026. 

Goldman Sachs analyst Brett Feldman on December 6 assumed coverage of Lumen Technologies, Inc. (NYSE:LUMN) with a Neutral rating and a $6 price target, representing 15% upside potential. The company is better positioned to execute its business plan following its recent “transformational steps,” the analyst told investors. 

According to Insider Monkey’s data, 34 hedge funds were bullish on Lumen Technologies, Inc. (NYSE:LUMN) at the end of September 2022, compared to 42 funds in the prior quarter. 

Here is what Longleaf Partners Fund has to say about Lumen Technologies, Inc. (NYSE:LUMN) in its Q1 2022 investor letter:

“Lumen – Lumen reported weak organic revenue growth and guided more weakness for 2022. We expect revenue growth to kick back in towards the end of 2022, and the huge FCF coupon helped offset value decline from the weaker guidance. The other factor weighing on the stock price was largest shareholder Temasek’s partial sale of its 10% position in the quarter, creating uncertainty and a share price overhang. We have a 13D filed and continue to urge the company to take steps to address the significant price-to-value gap, including continued share buybacks.”

6. Frontier Communications Parent, Inc. (NASDAQ:FYBR)

Number of Hedge Fund Holders: 42

Frontier Communications Parent, Inc. (NASDAQ:FYBR) is a Connecticut-based company that provides communications services for consumer and business customers in the United States. It offers data, Internet, voice, video, and other services. On November 2, Frontier Communications Parent, Inc. (NASDAQ:FYBR) added 66,000 fiber broadband customers, up 15.8% on a year-over-year basis. 

On November 9, Citi analyst Anthony Nemoto maintained a Buy rating on Frontier Communications Parent, Inc. (NASDAQ:FYBR) but lowered the firm’s price target on the shares to $31 from $32. Frontier Communications Parent, Inc. (NASDAQ:FYBR)’s Q3 results continued to show execution proof points of its fiber upgrade strategy, while financials were mixed, the analyst wrote in a research note.

According to Insider Monkey’s third quarter database, 42 hedge funds were bullish on Frontier Communications Parent, Inc. (NASDAQ:FYBR), with collective stakes worth $2.6 billion, compared to the same number of funds in the prior quarter worth $2.7 billion.   

Like T-Mobile US, Inc. (NASDAQ:TMUS), Comcast Corporation (NASDAQ:CMCSA), and AT&T Inc. (NYSE:T), Frontier Communications Parent, Inc. (NASDAQ:FYBR) is one of the premier telecom stocks to invest in. 

Click to continue reading and see 5 Best Telecom Stocks to Buy Right Now

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Disclosure: None. 11 Best Telecom Stocks To Buy Right Now is originally published on Insider Monkey.

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The “Toll Booth” Operator of the AI Energy Boom

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Click to continue reading…