Author Archives: Scalper1

AT&T, T-Mobile Usual Suspects In FCC Auction, But Mysteries Remain

Federal regulators say 104 companies — including, as expected,  AT&T ( T ), Verizon Communications ( VZ ) and T-Mobile US ( TMUS ) — have applied to bid on airwaves owned by TV broadcasters, but analysts are still tempering expectations for the auction. While the Federal Communications Commission late Friday released the list of applicants, it was still unclear just which telecom companies are tied to some of the 104 bidding entities. The FCC is expected to release a more detailed list soon. “The more interesting takeaways will evolve as we learn more about the underlying ownership of the bidding entities,” said Michael Rollins, a Citigroup analyst, in a research report. “Initial applicant lists for FCC auctions can be a bit difficult to decipher since many bidders will submit applications through subsidiaries with different names,” Goldman Sachs analyst Brett Feldman wrote in a report. The FCC plans to begin the “Broadcast Incentive Auction” on March 29. The auction, which could last five to six months, will free up an estimated 60 to 80 megahertz of prime, low-frequency spectrum for wireless services. Based on public statements, analysts expect Comcast ( CMCSA ) and Dish Network ( DISH ) to be among the bidders. Cable firm Charter Communications ( CHTR ) is not among the 104 listed companies, but John Malone-controlled Liberty Global ( LBTYA ) is included. Despite speculation that  Sprint ( S )-owner SoftBank ( SFBTY ) could take part in the auction, there’s no sign of the Japanese telecom in initial filings. In a report published on Monday, Goldman Sachs estimated phone and cable TV companies may spend only $21 billion in the auction, though other bidders could raise auction proceeds as high as $30 billion. Alphabet ’s ( GOOGL ) Google has ruled itself out, and no Internet companies are in the 104 public applicants, though ties to some bidding entities might exist. A Bloomberg survey has estimated the auction will raise only $33 billion, much less than the $60 billion figure floated by some observers in mid-2015. Citigroup estimates bids could reach $43 billion, however, in the neighborhood of 2015’s “AWS-3” auction, which had 80 listed eligible bidders.

How To Find The Best Sector Mutual Funds: Q1’16

Finding the best mutual funds is an increasingly difficult task in a world with so many to choose from. How can you pick with so many choices available? Don’t Trust Mutual Fund Labels There are at least 242 different Financials mutual funds and at least 647 mutual funds across ten sectors. Do investors need 64+ choices on average per sector? How different can the mutual funds be? Those 242 Financials mutual funds are very different. With anywhere from 22 to 571 holdings, many of these Financials mutual funds have drastically different portfolios, creating drastically different investment implications. The same is true for the mutual funds in any other sector, as each offers a very different mix of good and bad stocks. Consumer Staples ranks first for stock selection. Utilities ranks last. Details on the Best & Worst mutual funds in each sector are here . A Recipe for Paralysis By Analysis We think the large number of Financials (or any other) sector mutual funds hurts investors more than it helps because too many options can be paralyzing. It is simply not possible for the majority of investors to properly assess the quality of so many mutual funds. Analyzing mutual funds, done with the proper diligence, is far more difficult than analyzing stocks because it means analyzing all the stocks within each mutual fund. As stated above, that can be as many as 571 stocks, and sometimes even more, for one mutual fund. Any investor focused on fulfilling fiduciary duties recognizes that analyzing the holdings of a mutual fund is critical to finding the best mutual fund. Figure 1 shows our top rated mutual fund for each sector. Figure 1: The Best Mutual Fund in Each Sector Click to enlarge Sources: New Constructs, LLC and company filings The Fidelity Select Communications Equipment Portfolio (MUTF: FSDCX ) ranks first, the Davis Financial Fund (MUTF: DVFYX ) ranks second, and the Fidelity Select Health Care Services Portfolio (MUTF: FSHCX ) ranks third. The ICON Natural Resources Fund (MUTF: ICBMX ) ranks last. How to Avoid “The Danger Within” Why do you need to know the holdings of mutual funds before you buy? You need to be sure you do not buy a fund that might blow up. Buying a fund without analyzing its holdings is like buying a stock without analyzing its business and finances. No matter how cheap, if it holds bad stocks, the mutual fund’s performance will be bad. Don’t just take my word for it, see what Barron’s says on this matter. PERFORMANCE OF FUND’S HOLDINGS = PERFORMANCE OF FUND If Only Investors Could Find Funds Rated by Their Holdings… The Davis Financial Fund (DFVYX) is the top-rated Financials mutual fund and the overall best fund of the 571 sector mutual funds that we cover. The worst mutual fund in Figure 1 is the American Century Quantitative Equity Utilities Fund (MUTF: BULIX ), which gets a Dangerous rating. One would think mutual fund providers could do better for this sector. Disclosure: David Trainer and Kyle Guske II receive no compensation to write about any specific stock, sector, or theme. Disclosure: I/we have no positions in any stocks mentioned, and no plans to initiate any positions within the next 72 hours. I wrote this article myself, and it expresses my own opinions. I am not receiving compensation for it. I have no business relationship with any company whose stock is mentioned in this article.