Buy AT&T on Any Fed Fairytale

AT&T (NYSE: T) is underperforming the market today, as are utilities more broadly. It’s on a macro issue or beta-driver that I believe will be undone before long. The nascent risk-on race for stocks is being fueled by a favorable media and market interpretation of Fed Chair Yellen’s speech Tuesday. If it continues, it could start to pull capital from safe haven sectors like utilities (and telecom) in order to put it to work in riskier areas. However, this leg of the rally is based on a fairytale, in my opinion, fueled by faulty Fed expectations and economic softness, driven not by substance but by a negative feedback loop (read this). As March data reaches the wire next month, I expect its strength will paint a different picture that will change the Fed Chair’s tune once again, serving AT&T again. So, any weakness we see in AT&T and its telecommunications and utility brethren near-term should be bought in my view, as any lost capital will come back quickly. That should be limited for AT&T anyway, given the stock’s dividend payout and near-term dividend record date, which holders will at least wait for. See more of this report about AT&T shares here.

Please see our disclosures at the Wall Street Greek website and author bio pages found there. This article and website in no way offers or represents financial or investment advice. Information is provided for entertainment purposes only. Editor’s Note: This article should interest investors in Alaska Communications Systems Group (Nasdaq: ALSK), AT&T (NYSE: T), Atlantic Tele-Network (Nasdaq: ATNI), BCE Inc. (NYSE: BCE), CenturyLink (NYSE: CTL), Chunghwa Telecom (NYSE: CHT), Cincinnati Bell (NYSE: CBB), Consolidated Communications (Nasdaq: CNSL), eOn Communications (Nasdaq: EONC), Equinix (Nasdaq: EQIX), FairPoint Communications (Nasdaq: FRP), Frontier Communications (Nasdaq: FTR), Hickory Tech (Nasdaq: HTCO), IA Global (OTC: IAGI.PK), magicJack VocalTec (Nasdaq: CALL), Shenandoah Telecommunications (Nasdaq: SHEN), SureWest Communications (Nasdaq: SURW), tw telecom (Nasdaq: TWTC), UniTek Global Services (Nasdaq: UNTK), Verizon (NYSE: VZ), Vonage (NYSE: VG), Warwick Valley Telephone (Nasdaq: WWVY) and Windstream Corp. (Nasdaq: WIN).