Hot stocks to watch this morning: BA, MRVL, TOSYY >>> READ MORE

3 Reasons Why I Bought AT&T Inc. (T) Stock

In the big picture, AT&T stock looks very promising

    View All  

To say the past year or so has been an eventful one for AT&T Inc. (NYSE:T) would be a considerable understatement. It’s been a surprisingly wild year, with AT&T stock falling from a high above $43 in July of last year to a low near $35 last month, only to see it bounce back to over $39 recently.

I’ve got a feeling, though, the stock’s weakness has run its course and that we’ll see the AT&T stock price start to meaningfully rise from here.

There are three key drivers behind this brewing upside that deserve a closer look.

For the sake of full disclosure, I own a decent-sized position in AT&T stock. But just for the record, I’d still be pointing these things out about the company whether I was a shareholder or not. It just so happens that my ownership has prompted me to remain intimately familiar with the company, which in turn has allowed me to pass some extra perspective along.

On with the show….

AT&T’s Time Warner Deal Is Almost Done

The proposed pairing with Time Warner Inc (NYSE:TWX) isn’t consummated yet, and technically speaking it could still be upended. But after the long journey the two companies have already made down that road, it doesn’t appear much will be feasibly able to stop it now. From here, we can start to look at how AT&T will benefit from the deal.

In short, the wireless telecom giant gets access to a huge library of video content; it already owns the pipe through which it will be conveyed.

It is the newest trend in telecom, as the lines between the medium and the media are continually blurred. For instance, Verizon Communications Inc. (NYSE:VZ) now owns Yahoo, and Discovery Communications Inc. (NASDAQ:DISCA) is on the verge of owning Scripps Networks Interactive, Inc. (NASDAQ:SNI). By buying Scripps, Discovery CEO David Zaslav is increasingly trying to sell content directly to consumers. AT&T is simply building a company that can provide a one-stop content-delivery solution, as it has with DirecTV.

AT&T Stock is the 5G Leader

Though investors and consumers have heard a lot about it, they’ve yet to actually see 5G wireless internet connectivity. That’s about to change though, largely courtesy of AT&T.

As I opined in September, though most wireless telecom players are doing something to stake their claim in the 5G connectivity arena, it’s AT&T that appears to be the most forward-thinking of the bunch. It’s not just installing the proper hardware to make 5G possible. It’s anticipating how businesses and customers will want and need to utilize these high-speed connections, and developing services before would-be customers even realize they have the need.

It’s not just businesses, however. AT&T is ready to roll out 5G speeds to consumers as well. Just within the past few days, smartphone maker LG put its 5G-ready LG V30 phone on shelves at AT&T stores, and it’s capable of connecting users with a true 5G transmission right now in a handful of markets.

AT&T is going to be one of the first to commercialize this new technology, paving the way for the Internet of Things.

Next Page

Article printed from InvestorPlace Media,

©2017 InvestorPlace Media, LLC