Don’t Forget About The Large Telcos
While investors are focusing on the ensuing battle between AT&T (T) and the big cable companies over providing voice, video and data to the home, many might need to be reminded that the telco giants have a massive enterprise business that is ripe to benefit from improved pricing.
Remember there are few companies that can provide high-level enterprise service on a nationwide basis — AT&T and Verizon Communications (VZ) are pretty much it. You would be hard pressed to name another.
Qwest Communications (Q) has not said much about what it wants to do with its fiber network and although Level 3 Communications (LVLT) is picking up its business, it will not be enough to threaten the positions of the two behemoths.AT&T and Verizon’s stock performance, while doing well recently, has been held back by investors wondering where the revenue growth is.
Now it appears that growth might be ready to return. Jim Crowe, Level 3’s CEO, said a few months back that one issue the industry no longer has is pricing, a big change from a few years ago.Verizon and AT&T have been written about more positively over the past few days, as Bear Stearns and Citigroup are both recommending the stocks. Sometimes the best stocks are in the most obvious places. AT&T and Verizon are two large companies that are worth looking at again.
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