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Why I Believe Sprint Trades 10-40% Higher in The Near Future

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September 28, 2011 – Comments (0) | RELATED TICKERS: S , VZ , AAPL

I am here to share why I think Sprint is a good for a short term and long term hold. Some might argue that the stock is headed lower because it's too cheap and has a negative return on equity. However, I am going to share with you why I believe this stock has the likelihood of moving to the upside rather than downside.

 

Technically, the downside verses the potential upside is huge. The stock is near its 52 week lows and is 51% from its 52 week highs. Sprint ($S) is also near a bottom and considering how whipsaw the market has been lately the stock is holding well.

 

Here's the Technical Analysis on Sprint

 

 

Secondly, Sprint's image will greatly improve when they are officially holding THE one and only iPhone. Some will disagree and even think that the iPhone 5 will be a disappointment (Verizon lovers). But I am here to tell you otherwise.

 

Few interesting points to consider:

 

Cheap $79.99 Unlimited plan with the iPhone. (is subject to change I hear)

Apple holding iPhone 5 event on October 4. Anything tied to AAPL is bound to have growth.

51% away from its 52 week high and only 6% from its week 52 week low.

Dish network may consider partnering with or buying Sprint.

Improving Network the past 3 years

First carrier to have the 4G network

Stock was just trading in the high $5 range in July

52 million subscribers and growing

Price target of $4.80 by Trefis 

 

Sprint's Recent Press Releases:

 

Apple to Introduce New IPhone on Oct. 4

Dish Looks Ready To Dance With Clearwire or Sprint

Sprint Said to Be Launching LTE Network Early Next Year

CMT Expands Mobile Offerings with the Launch of Its Sprint ID Pack Designed for Country Music Fans 

 

Now its a know fact that Sprint has had a hard time with generating growth and producing profits. My guess is the profits will grow if they keep working hard at improving their service. And we can only speculate how much revenue will be generated by the hype of the new iPhone 5. The iPhone is a hot trend and we all now in this business trend is your friend.

 

Lastly, my analysis on Sprint is a long term hold. I am speculating that the stock will rise to $4-$4.80 a share buy the end of this year or early next year. (Lets not forget Christmas is right around the corner. How convenient, right?) My stop is placed right below 2.90. I know a lot of people have that same mindset going in. Also, I am only 25% position sized in Sprint right now. I am still waiting for better market condition and or news next week to buy more shares.

 

Disclosure: I do own 2,500 shares of Sprint at an average price of 3.12. Be forewarned, this stock can drop. There isn’t a 100% chance this stock moves higher. There are risks involved when investing. Trade responsibly.

 

 

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