In this article, we discuss 5 best telecom stocks to buy right now. If you want to read about some more telecom stocks to buy right now, go directly to 10 Best Telecom Stocks to Buy Right Now.
5. AT&T Inc. (NYSE:T)
Number of Hedge Fund Holders: 55
AT&T Inc. (NYSE:T) provides telecommunications, media, and technology services worldwide. It is one of the elite communication stocks to invest in. On September 28, the company announced that it had won a task order to modernize networks for the US Customs and Border Protection. The task order is worth over $119 million and comes with an eleven year deal if all options are exercised. The order calls for upgrades on virtual private networking services, cloud connectivity, audio conferencing capabilities, and managed network and security services.
On August 18, investment advisory MoffettNathanson maintained a Market Perform rating on AT&T Inc. (NYSE:T) stock and lowered the price target to $17 from $19. Analyst Craig Moffett issued the ratings update.
At the end of the second quarter of 2022, 55 hedge funds in the database of Insider Monkey held stakes worth $1.7 billion in AT&T Inc. (NYSE:T), compared to 74 in the preceding quarter worth $4 billion.
In its Q2 2022 investor letter, Argosy Investors, an asset management firm, highlighted a few stocks and AT&T Inc. (NYSE:T) was one of them. Here is what the fund said:
“I purchased shares of AT&T Inc. (NYSE:T) prior to its spin-off of Warner Brothers Discovery (WBD). Most people are probably familiar with AT&T. They are a major cellular service provider, and until recently owner of the Time Warner media assets, which include HBO, CNN, TNT, TBS, Cartoon Network, DC Comics and the Batman content brands, and more. At the time of my purchase, I estimated that the combined T/WBD assets traded at a 15% levered FCF yield, or 6x FCF. I also believe that WBD, which now has HBO Max, has future growth in front of it which was previously in doubt when Discovery was primarily tied to the declining cable television bundle. Since then, Netflix reported disappointing subscriber growth, which threw all streaming companies into disarray. WBD followed that news with a disappointing outlook on its business during its own quarterly earnings.
As a result, shares of WBD have declined nearly 40% since the spin-off. WBD now trades for 7x 2023E FCF and there is great potential for returns over the next few years as WBD pays down debt used to finance its merger combining Warner Brothers and Discovery and grows. We do not own a large position in WBD at present, but we may add to it over time.”
4. Verizon Communications Inc. (NYSE:VZ)
Number of Hedge Fund Holders: 58
Verizon Communications Inc. (NYSE:VZ) offers communications, technology, information, and entertainment products and services. It is one of the top communication stocks to invest in. On September 28, the firm announced new products that outline the focus towards home entertainment experiences. A gaming device is also part of the new lineup of products by the telecom firm. The firm revealed the next iteration of the popular Verizon Receiver as well, which it says is more than 60% smaller and lighter.
On September 29, Barclays analyst Kannan Venkateshwar maintained an Equal Weight rating on Verizon Communications Inc. (NYSE:VZ) stock and lowered the price target to $40 from $48, noting that broadband unit growth challenges were now well understood.
Among the hedge funds being tracked by Insider Monkey, Washington-based firm Fisher Asset Management is a leading shareholder in Verizon Communications Inc. (NYSE:VZ), with 17 million shares worth more than $879.8 million.
In its Q4 2021 investor letter, ClearBridge Investments, an asset management firm, highlighted a few stocks and Verizon Communications Inc. (NYSE:VZ) was one of them. Here is what the fund said:
“Over the last year, we have repositioned our portfolio to navigate the course we see ahead. We added to more defensive areas of the portfolio like telecom Verizon Communications Inc. (NYSE:VZ). While the next month or two will likely prove choppy on account of the Omicron variant, we believe that Omicron, like Delta, represents a speed bump on the way to recovery rather than a true change in course. We see strong economic momentum continuing in 2022 and we expect interest rates to rise. After a decade of remarkably low rates, we would not be surprised if this change in direction is accompanied by some fits and starts in the markets. With our emphasis on pricing power, purposeful sector exposure, valuation discipline, and a strong dividend profile, we believe we are well-positioned for the year ahead.”
3. Charter Communications, Inc. (NASDAQ:CHTR)
Number of Hedge Fund Holders: 68
Charter Communications, Inc. (NASDAQ:CHTR) operates as a broadband connectivity and cable operator company serving residential and commercial customers in the United States. The firm is among the best communication stocks to invest in. Some of the services that the company provides include subscription-based video services, including video on demand, high-definition television, digital video recorder, and pay-per-view, as well as internet services that protect computers from viruses and spyware.
On August 24, investment advisory KeyBanc maintained an Overweight rating on Charter Communications, Inc. (NASDAQ:CHTR) stock and raised the price target to $592 from $555. Analyst Brandon Nispel issued the ratings update.
At the end of the second quarter of 2022, 68 hedge funds in the database of Insider Monkey held stakes worth $5.7 billion in AT&T Inc. (NYSE:T), compared to 73 in the preceding quarter worth $8.5 billion.
In its Q2 2022 investor letter, Andvari Associates, an asset management firm, highlighted a few stocks and Charter Communications, Inc. (NASDAQ:CHTR) was one of them. Here is what the fund said:
“Regarding Liberty Broadband, Andvari has owned it for the last 7+ years primarily because of its large stake in cable company Charter Communications (NASDAQ:CHTR). Given that Liberty also traded at a wide discount to its own net asset value, Andvari saw this as an even cheaper way to own Charter. We sold Liberty because we saw (too slowly) a violation of one of the core parts to our investment thesis: pricing power at Charter was not as great as we imagined. Charter has not been able to raise prices in line with inflation. To add insult to injury, the trade association for the U.S. cable industry started proudly advertising about how internet price increases have remained far behind the rate of inflation.”
2. Comcast Corporation (NASDAQ:CMCSA)
Number of Hedge Fund Holders: 75
Comcast Corporation (NASDAQ:CMCSA) operates as a media and technology company worldwide. The company is one of the most prominent communication stocks to invest in. On September 20, the company announced that it had succeeded in the test of a new technology that it wants to use to deploy multi-gigabit symmetrical speeds throughout its entire broadband network. The company had previously completed successful tests of the 10G network and a complete network-to-home 10G loop.
On September 29, Barclays analyst Kannan Venkateshwar maintained an Equal Weight rating on Comcast Corporation (NASDAQ:CMCSA) stock and lowered the price target to $34 from $42, noting that cable headline metrics heading into 2023 may be worse than telecom.
Among the hedge funds being tracked by Insider Monkey, New York-based firm First Eagle Investment Management is a leading shareholder in Comcast Corporation (NASDAQ:CMCSA), with 30 million shares worth more than $1.2 billion.
In its Q4 2021 investor letter, ClearBridge Investments, an asset management firm, highlighted a few stocks and Comcast Corporation (NASDAQ:CMCSA) was one of them. Here is what the fund said:
“Weakness among our holdings in the communication services sector was the other detractor to performance.Comcast Corporation (NASDAQ:CMCSA) was hurt by tepid subscriber growth in its broadband business but demonstrated strong growth in free cash flow, positioning the company for accelerated capital return going forward.”
1. T-Mobile US, Inc. (NASDAQ:TMUS)
Number of Hedge Fund Holders: 96
T-Mobile US, Inc. (NASDAQ:TMUS) provides mobile communications services. The firm features on the list of best communications stocks to invest in. On September 26, the firm announced that it had extended a long-standing partnership with Assurant to continue providing comprehensive mobile device protection solutions. Over the last ten years, the two companies have leveraged innovation and agility to enhance the device ownership experience for customers.
On September 9, investment advisory Raymond James maintained a Strong Buy rating on T-Mobile US, Inc. (NASDAQ:TMUS) stock and raised the price target to $178 from $175. Analyst Ric Prentiss issued the ratings update.
Among the hedge funds being tracked by Insider Monkey, Connecticut-based investment firm Viking Global is a leading shareholder in T-Mobile US, Inc. (NASDAQ:TMUS), with 9.2 million shares worth more than $1.2 billion.
In its Q4 2021 investor letter, ClearBridge Investments, an asset management firm, highlighted a few stocks and T-Mobile US, Inc. (NASDAQ:TMUS) was one of them. Here is what the fund said:
“As mentioned, the communication services sector has come under some pressure, and irrational pricing competition has negatively impacted wireless industry growth and profitability of late, weighing on T-Mobile US, Inc. (NASDAQ:TMUS). Faced with these headwinds, and with pressure from other wireless carriers and cable companies that could cause the company to cede share in subscriber growth in 2022, we exited our position in the fourth quarter.”
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