Recent Buy - AT&T (T)

It been over a month since my last stock purchase, which can be found here.  The indexes have been approaching their record highs hit shortly after the first of the year, however, some stock valuations are still hanging out near their 52 week lows.  One such stock is AT&T (T) and today I've decide to add to my position.  Take a look below for the details on the purchase along with some additional commentary.

Purchased:  30 shares x $31.65 = $949.50 (+ $4.95 commission fee)

Dividend Income: $2.00 sh/annually x 30 shares = $50.00 in additional dividend income

I have been slowly building my position in AT&T over the past year or so and my last purchase before today was nearly a little over two months ago back in May, which you can read more about here. I won't bother updated the metrics found at last post as not much has changed with those metrics in the time since.  This latest purchase brings my total T share count to 160 shares.

The only real material change since then is that the court case against AT&T's merger with Time Warner was decided upon and the transaction was allowed to proceed and completed nearly as soon as the judge's decision was made public.  Now, just this week the DOJ has notified the public that it intends to appeals the decision.  As noted in a recent Reuters article, AT&T's CEO, Randall Stephenson appeared on CNBC after news of the DOJ announced it plan to appeal and said the original court decision was well reasoned. "At the end of the day the law was on our side," he said. "We think the likelihood of this thing being reversed or overturned is really remote."  At the end of the day, regardless of whether the Time Warner remains as it or is broken up as a result of the anticipated appeal by DOJ, the company's valuation is appealing.

A few weeks ago, Wells Fargo hosted a conference where CEO Randall Stephenson provided some additional details on the recent merger.  Included in the presentation which can be found here was the following concerning immediate financial priorities.

 

Lastly, it was noted in the media recently that Netflix just beat out HBO (now owned by AT&T via the Time Warner acquisition) for the most Emmy nominations this year - 112 for Netflix vs. 108 for HBO (still quite impressive).  No doubt that may people love Netflix and the volume of entertainment it providers from content it creates and leases, however, Netflix's market CAP valuation is currently sitting at $172 billion - wow!  Now compare this valuation to of the Time Warner acquisition valued at $85.4 billion - Netflix is currently trading at 2x of  the purchase price of Time Warner.  Kind of puts things in perspective for me if not for the shareholders of Netflix when you take earnings and/or cash flow into account as well.  Furthermore, latest valuation for AT&T as a whole is sitting at $232 billion.  These relative valuations for the assets of each company as well as the respective earnings makes it a no-brainer for me when deciding which company is the better bet.  Netflix has a lot of earnings growth account for over the coming decade to justify its current valuation - I'll continue to be a subscriber at current prices but will pass on being an owner at current valuation!

Now back to the purchase of AT&T, who else is making a purchase?  AT&T look attractive to you?