S

[terainvestment]

Hi David,

I read in AUTH analysis that S (Sprint Nextel) has a target price of 12.5$
Do you think is a good investment or a stock to avoid?

[David Randolph]

Hi David,

I read in AUTH analysis that S (Sprint Nextel) has a target price of 12.5$
Do you think is a good investment or a stock to avoid?

"S", just by the ticker symbol I knew it had to be a large cap. Indeed, it is a $22.5 B market cap.

S has been moving up on rumors, be it a combination with Clearwire (CLWR) on Wimax, sale or spin of Nextel, possibly to Cyren Call and a sale to Deutsche Telekom.

I guess a sale to DT would be the most bombastic news, but probably it won't happen, or else there wouldn't be this publicity. Most buyouts come by surprise, or does anyone think a company will let its takeover plans become publicly known information before the deal is closed and then have to pay a higher price (or a lower premium) to shareholders?

The sale of Nextel would also be positive news because that unit has been a drag on Sprint's profits.

Now, the one that really materialized (news out after hours), a $12 B combination with CLWR to build WiMax, with the financial backing of Intel, Comcast, Time Warner and Google is also good news, but I don't think it will have a very significant financial impact over the short and medium term. Anyway, the stock was up an additional 5.5% after hours.

I see the trading action as a classic "buy the rumor, sell the fact" type of trade. And in this case, the fact could have been a lot better, so I say the stock opens sharply higher but closes in the red today.

Other than this news I don't like the stock at all, too much market cap for too little and too volatile results.

[setravis]

In the Spotlight Thursday.......It could climb higher...set stops! 
The wireless carrier rose 3.4% on news that the company's new Instinct touchscreen handset is so popular that some retailers are out of stock, even as Samsung, the phone's manufacturer, is operating plants at full capacity. "Sprint knew they had to have a slam-dunk device in the market," Jane Zweig, a wireless consultant who runs The Shosteck Group, told MarketWatch on Thursday. "They put a lot of money into marketing and worked very closely with Samsung on it."

52wk Range: 5.48 - 22.64
Volume: 64,799,736
Avg Vol (3m): 34,696,100
Market Cap: 25.20B
P/E (ttm): N/A
EPS (ttm): -10.46
Div & Yield: 0.10 (1.20%)

Technicals
Most Actives
Percentage Gainer

Last Price Quote is:
5.23%above 13-day MA
4.67%above 50-day MA
RS Rating: 99 

Fundamentals
Key Data:
Market Cap (M): $22,551.45 
P/E Ratio: 194.41 
PEG Ratio: 4.2 
Next Earnings: 08/06/2008
Last Analyst Rating: Equal Weight