5 days AT&T undervalued? Reddit      

AT&T hasn't been this low since 2010. Telecommunications won't go anywhere in the next decade. Sure there is minimal growth, but this company is pretty diversified into other industries when compared to Verizon and T-mobile. Those two companies are nearly at all-time highs, but they have the same debt problem, and their debt-equity ratio is actually higher.

$T debt to equity: 0.77

$TMUS debt to equity: 0.94

$VZ debt to equity: 0.89

Historically, AT&T's debt to equity ratio has slowly been increasing since 2006. But their ratio of debt was much higher from 2014 to 2018, they seem to be managing it much better now and are paying it off aggressively.


At these current interest rates, they aren't in too bad of a situation.

Free Cash Flow: 43.04B
Free Cash Flow (after debt has been paid): 28.62B

The recent selloff seemed to be due to inflation fears leading to higher interest rates. There's no doubt inflation is here/coming, oil has gone from $40 to $80 a barrel, consumer prices have already increased, and I'm sure you've heard about construction materials.

However, AT&T weathered the storm in 2008 and ended up lowering its debt until 2012. An inflation-based financial crisis likely won't cause more damage than 2008. This leads me to believe the debt fears are overblown and this is a buying opportunity at $25.30. I don't have a price target, but I'd be thinking of selling when this company proves yet again that debt won't lead them into bankruptcy.

Disclaimer: AT&T is my smallest position, and I'm thinking of DCA over the next few months. I'd love to hear what others with more insight think about this company.

submitted by /u/Senator_Beetlejuice
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