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$9.17 -0.23 (-2.45%)
5/16/2008 4:02 PM

Sprint Nextel Corp (S)

CAPS Rating:
**

A global communications company offering a range of wireless and wireline communications products and services that are designed to meet the needs of individual consumers, businesses and government customers.

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Avatar PrinciplesPlus (72.59) Submitted: 3/14/08 12:47 PM : Outperform Start Price: $6.06 S Score: 41.54

There is so much negativity built into Sprint that you just can't push it down much more. It is a given that Sprint has had a lot of bad press caused by customer care issues and misconceptions on the merger of Sprint and Nextel, and this has given rise to Sprint's poor image and customer defections. People have become hesitant to be associated with the Sprint name, making people much more likely to jump to another carrier.





You have to look at the hand that Sprint holds, though, and see that Sprint has an arsenal of tools to turn the company around...it just takes the right management to use them. If you compare the actual network performance, Sprint outperforms in both voice and data. All it will take is for some of the naysayers to jump off the Sprint-loathing bandwagon and the customers will start to realize their service is really pretty great. Add to that Sprint's recent improvements in customer service, industry-best pricing plans and pretty cool phone lineup and you will start adding customers again.





Even if you simply value the company based on assets, it looks cheap. A massive network infrastructure combined with loads of spectrum in the 800, 900, 1900 and 2500 MHz bands, there is tremendous value bottled up.





Two options for Sprint, and they both signal a buy:


a) Public perception shifts and profits accelerate


b) Company is bought up for a premium





Good luck,


PP

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Avatar YoungInvestor99 (75.52) Submitted: 5/06/08 12:37 PM

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Does anyone know why Sprint just lost like $29 billion in 2007? (See income statement on this site)

If it was a one time charge - it seems they will be fine and the market just got super skeptical. If its their business in trouble, I am gonna have a hard time outperforming this stock because that is a HUGE loss, many times what their normal net income was.

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Avatar PrinciplesPlus (72.59) Submitted: 5/07/08 12:44 PM

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The company wrote down $31 billion of goodwill value associated with the Nextel merger. It was entirely a paper loss based on the current value of the Nextel and affiliate assets purchased being much lower than the value that they had been carrying on the books.

Its like buying a house for a $1 million and then 2 years later it is worth $500k. You can't say you have a $1 million asset any more, so your accountant writes off a loss. If you didn't sell the house, though, you didn't realize an actual loss.

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