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April 26, 2005
Cable Versus Telecom
The Motley Fool (click here) likes SBC Communications. An investing article on 25-April highlighted the latest earnings report and stated that SBC was part of the Motley Fool Stock Advisor portfolio. The strengths for SBC reside in the big brand, the broadband rollout and the juicy dividend.
However, investors and traders seem to see something else. Namely, that SBC lost 500,000 access lines last quarter and still has the AT&T merger to digest. In contrast, Time Warner and Comcast have been adding thousands of new customers each quarter for voice-over-internet telephony. This is not a healthy trend and the cable companies are still getting the better of the old bells.
But we don’t need the numbers to tell us who is winning. The price charts show the winners all too clear. SBC and Verizon are trading near their 52-week lows and in clear downtrends.
In contrast, Comcast is trending higher and trading near rising trendline support.
Time Warner is not as strong, but remains well above its August low and is finding support near the February low.
Posted by Arthur B. Hill at April 26, 2005 08:29 AM