It seems pretty clear after the past two days of trading that many on Wall Street have an itchy trigger finger after the big run-up that started in mid-February, and with two 10% corrections in a period of six months, who can blame them? Factor in that most managers had a bad 2015, and a big first quarter may have helped them start to 2016, and the selling makes even more sense.
What this also means is that investors need to focus on value and stock selection probably more than ever. With earnings ready to roll for the first quarter starting next week, all eyes will be on results. A recent Jefferies report focuses on top values picks for this week, and three make good sense now.
AT&T
This company will continue to serve customers regardless of outside influences and still makes good sense despite a solid 2016 run so far. AT&T Inc. (NYSE: T) is the world’s largest provider of pay TV, with TV customers in the United States and 11 Latin American countries. In the United States, the AT&T wireless network has the nation’s self-described strongest 4G LTE signal and most reliable 4G LTE.
The company also helps businesses worldwide serve their customers better with mobility and highly secure cloud solutions. With shares trading at a very cheap 12.5 times estimated 2016 earnings, the company continues to expand its user base, and strong product introductions from smartphone vendors have not only driven traffic, but increased device financing plans.
AT&T has been focusing on the IP VPN and Ethernet services. This outstanding business model, along with the decline of Verizon’s market share in the arena, has helped the company to meaningfully grow its revenues from strategic business services. Apart from taking appropriate technical measures, the company has collaborated with big cloud service providers like Amazon Web Service and data center operators to provide Ethernet connections.
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