We recommend buying long Spring Nextel Corporation stock. Stock selection is based (Spring has rocketed our estimate, 2013) on the company’s technical expertise, upcoming business activities, current stock performance, analysts’ evaluation and information on discounted cash flow (Discounted cash flow analysis, 2012). The company’s stock performance between January 2012 and April 2013 shows 195 % increase. January 2012 price was 2.12, which in April 2013 climbed to 6.25. Review of price to sales (P/S) ratios of years from 2009 to 2011 showed that Sprint stockholders paid significantly low price (form 0.21 to 0.43) for one-dollar sale compared to its nearest competitors Verizon and AT&T. Sprint is the third largest wireless carrier of the USA; widely known for developing innovative technologies, including first wireless 4 G service. Sprint owns extensive wireless networks, all digital global long-distance network and Tier 1 Internet backbone (Form 10 – K, 2010). Company’s technical evaluation is characterized as bullish (Spring has rocketed our estimate, 2013). Sprint’s $20 billion deal in 2012 with the Japanese company SoftBank secures the cash flow. Sprint’s partnership with Clarewire will give full control of spectrum resource and LTE deployment. Sprint’s mega project Network Vision will revolutionize the wireless industry and generate substantial profit (Sprint seals deal with Clarewire). Sprint’s revenue for the last three years is on the constant increase (Sprint Nextel Corp.). Revenue growth prediction from 2013 to 2017 shows the constant increase from 35.7 billion to 40.2 billion. The company’s returns on invested capital (ROIC) for years 2009, 2010, and 2011 respectively were 3.4 %, 6.1 %, and 8.4 %. The analysts’ ROIC worst scenario prediction is 5.6 %, best-scenario is 15.5 %, and most-likely is 10.6 %. The mean of 26 analysts the current recommendation on Sprint stock is valued as Overweight (Analyst recommendations). Analysts predicted 36.83-percent growth in 2013, 79.78 percent in 2014, 199.05 percent in 2015, and 210.58-percent in 2016 (Forecast Earning Growth). The analyst’s estimated price to earning ratio (P/E) for 2015 is going to be 34.53 % (Price / Earning Ratio).
Aug 3, 2018 in Description