T-mobile Us Inc Com (NYSE:TMUS)

CAPS Rating: 3 out of 5

The Company offers wireless broadband personal communication services, or PCS, on a no long-term contract, flat rate, unlimited usage basis in selected major metropolitan markets in the United States.

Recs

1
Player Avatar LongShortIndex (30.22) Submitted: 4/30/2009 9:43:18 PM : Underperform Start Price: $33.94 TMUS Score: +69.21

This is a multipart communications play.
Sell short AT&T (T), MetroPCS (PCS), Leap Wireless (LEAP)
and
Buy Verizon (VZ), Sprint (S), United States Cellular (USM)

T, PCS, and LEAP are all trading at ridiculous levels higher than book value especially when compared to some of its peers (see buy list). Additionally taking into account their balance sheet expansion over the past 4 years, their future will be severely limited relative to its rivals going forward. These four already seemed priced to perfection.
With the funds gained from selling short the above
BUY VZ, S, USM, TDS
These companies are trading at a good value to its book. Verizon only shows value if compared to its biggest competitor, AT&T. As the rollout of 4G actually plays out by end of 2010, whether its LTE (VZ/AT&T's technology) or WiMax (Clearwire/Sprint/Intel's tech), VZ will have access to an even wider market (by having common network as AT&T) and Sprint is likely to carry SOME profit out of the mess. Sprint is already priced to failure of its Wimax technology, even if it shifed gears on technology & took further massive writedowns on its intangibles, its potential for expansion in the future seems strong. USM & TDS are essentially the same company through insider ownership & show great value compared to its rivals on the short list at the top of the pitch.
Disclosure: Currently own shares in USM. Am looking to jumping in some of the plays mentioned above.

Comments, Criticism, & discussion is most welcome.

Report this Post 2 Replies
Member Avatar LongShortIndex (30.22) Submitted: 4/30/2009 10:06:02 PM
Recs: 0

Additionally short CLWR & offset with buy in TDSAlthough CLWR's financials indicate its ability to continue expansion, its valuation today suggest success of rolling out Wimax profitably - I am going against the market on this one (Sprint is already priced at a discount)

Member Avatar plentyostocks (< 20) Submitted: 6/3/2010 2:17:23 PM
Recs: 0

Book Value ???? !!!!
When you consider that wireless companies can quickly write-off (amortize) their spectrum assets to zero (book value); even though those spectrum assets are rapidly appreciating in value; to think that book value is a good way to value the company is strange in my opinion.

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