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Providers of wireless telecom services climbed sharply in the industry rankings since the start of March. As a group, the industry gained 33% off a January low. It ranked No. 5 among IBD’s 197 industry groups on Thursday, up from No. 109 eight weeks ago. The primary drivers for that growth included thinly traded players Straight Path Communications ( STRP ) and Shenandoah Telecommunications ( SHEN ). Straight Path is up a blinding 400% since November. Shenandoah lodged a 57% advance off a January low. At the heavy end of the group are Sprint ( S ) and T-Mobile U.S. ( TMUS ). Sprint shares had a nice run off a late-January low through early March, but has since been stalled by resistance at its 40-week moving average. Earnings-wise, Sprint hasn’t turned a profitable quarter for at least a half decade. Get a broad look at AT&T and T-Mobile stock characteristics at IBD’s Stock Checkup. T-Mobile is a different case. The stock has a lot of negatives: a long, messy consolidation. A weak Relative Strength rating and a dicey quarterly report card when it comes to EPS and revenue growth. But consensus forecasts project a 59% earnings gain this year. That would mark the company’s third straight year of accelerating EPS growth. Forecasts project a 12% revenue gain — below increases of 24% and 21% in 2013 and 2014, respectively, but better than last year’s 8% gain. The company has earned an increasing following with their unlimited data plans at relatively low cost. Network coverage seems to be a steady complaint, but subscribers often put up and stay in because the rates are so good. T-Mobile posted a solid Q1 earnings beat on April 26. Equally important was its increase in subscriber growth. T-Mobile added 877,000 in postpaid customers for the quarter. Verizon Communications ( VZ ) reported a decrease of 8,000. AT&T ( T ) saw 363,000 customers jump ship. While taking market share, T-Mobile is also jockeying to make its network coverage more competitive. The company plans to spend $10 billion at a pending auction of bandwidth from local television providers. The result could disproportionately benefit T-Mobile, according to a recent note from Goldman Sachs , which is looking to shore up its thin, low-band position. The company’s build out of its low-band (700 MHz range) spectrum has currently reached 28 of the top 30 metropolitan areas. As a side note, German wireless provider Deutsche Telekom ( DTEGY ) owns about two-thirds of T-Mobile. Stir that together with the earnings forecast and it makes a somewhat compelling case for the stock. The stock’s chart also bears watching. An upshift in accumulation by institutional investors in the past two months lifted the stock’s Accumulation/Distribution to a solid B rating. Shares are hovering just below a 40.06 cup-with-handle buy point. They cleared that mark briefly for four days in April. They since have held steady, just above their converged 10- and 40-week moving averages. In the super-heavyweight category, AT&T is set to cap the fifth week of a shallow consolidation. If shares hold their place through Friday, the chart would present a flat base with a 39.82 buy point. A 19% run-up in January through April lifted the stock’s RS rating to a passing grade of 84. Its Accumulation/Distribution rating hovers at an acceptable B-. Scalper1 News
Scalper1 News