Will AT&T Stock go up? AT&T Stock Analysis with Learn to Invest

TL;DR

Jimmy from Learn to Invest shares his perspective on investing in AT&T, highlighting the company's spin-off and its potential for growth in the core business.

Transcript

check please welcome back to everything money we have a very special guest in the studio today jimmy from learn to invest is here welcome jimmy hi i'm jimmy we are talking about a t we paul you don't own shares of this but jimmy does so we're gonna have a healthy discussion between two value investors about the numbers behind this company the finan... Read More

Key Insights

• ✋ AT&T's spin-off of Warner Media presents an opportunity for the newly formed Warner Brothers Discovery company to trade at a higher multiple.
• ✋ High debt levels in the telecom industry are a concern, but the historical reliance on debt in the industry should be taken into account.
• 🥺 Dividends can impact stock prices and are often tax-inefficient, leading some investors to prefer companies that allocate cash towards growth or debt reduction.
• 🔨 The software provided by Everything Money offers valuable tools for stock valuation and access to a community of like-minded investors.
• 🥳 AT&T's stock is not very conducive to day trading due to its lack of volatility but can be a good option for long-term trading.

Questions & Answers

Q: What is the main reason Jimmy bought AT&T shares?

Jimmy purchased AT&T shares because of the upcoming spin-off of Warner Media and his belief that the newly formed Warner Brothers Discovery company will trade at a higher multiple.

Q: Why does Paul have reservations about investing in AT&T?

Paul is concerned about AT&T's high debt levels, which he believes require a higher margin of safety. He suggests cutting dividends to pay off debt and improve the company's financial health.

Q: How do dividends impact stock prices?

Dividends are often reflected in a decrease in stock prices on the ex-dividend date, as the company subtracts the amount of dividends paid from the stock price. Dividends are not a direct transfer of corporate funds to shareholders, as they result in a decrease in stock value.

Q: What is the main factor that worries Jimmy about AT&T?

Jimmy is concerned about the company's high debt levels but takes into account the industry's historical reliance on debt. He believes the debt will be managed with the spin-off and expects modest returns from AT&T and better returns from Warner Brothers Discovery.

Summary & Key Takeaways

• Jimmy purchased AT&T shares due to the company's spin-off of Warner Media, which he believes will result in the newly formed Warner Brothers Discovery company trading at a higher multiple.

• He appreciates AT&T's focus on their core business and the potential for better valuation once non-core businesses are spin-off.

• Paul, on the other hand, expresses concerns about the company's high debt levels and suggests cutting dividends to pay off debt and improve the health of the company.