Monday, March 19, 2007

All Around the World

AT&T (T) is one of those companies that can adapt to the changing times. The best companies (General Electric (GE) for example) are always able to do this. They've been dominant in the communications sector for years, and today I want to talk about their successful transformation into the wireless arena. Originally AT&T wireless, they purchased up-and-comer Cingular which was a great move. As you could imagine, the wireless market is huge. Cellular phones for one have basically revolutionized not only business, but life. Everyone has one. There is also the business of wireless networking as well. AT&T has become the exclusive provider or Apple's highly anticipated iPhone, due out this summer. I anticipate this product being a success. They have also made small moves like creating the ability for people to browse Myspace on their phones, as well as watch live tv. Best of all they are strong advertisers. Any successful large company is. Warren Buffett always talks about the correlation of the amount of money a company spends on advertising and its success. To this day, you do see a ton of his GEICO commercials.

Anyways, my point is that this company was a great buy five years ago, its a great buy now, and will be in five years. It trades at a premium to its competitors, but deserves to because it is the best out there. It is worth buying and holding just for the dividend (3.8%). Great management that has a clear focus as well. This is a great stock to sit on for 20 years.

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