Mcdonalds Stock (MCD)

Got to say at the current stock price for McDonalds (MCD), I'm loving it!  Short and long term buy.  Long term even more, after 35 years straight of Dividend increases got to love this company.  Food and coffee is so much better than a few years a go to boot.  Good luck investing.  Tony

MetroPCS (PCS)

I hate to say I told you so but this stock is moving up big time!  Earnings came in strong and now the market is playing catch up on their stock.   Closed over $9  a share today.  I have been recommending it since $6.50 a share.  Good luck investing.  Tony

MetroPCS (PCS)

The stock of Metro (PCS) is starting to catch up to the companies book value and earnings potential.  This company is the cheapest of the Cell Phone providing companies on a bunch of metrics.  The market will either price it up accordingly or someone will come in a buy them out at a premium.  Either way I look for $9 a share within a year, maybe higher.   Short and maybe long term buy.  Good luck investing.  Tony

Wendys (WEN)

In a tough market yesterday Wendys is hanging in there.  I notice some financial writers are jumping on the Wendys bandwagon.   It's not too late to get in.  This one has a long way to go up during the company's turnaround.  $7.50 a share within a year is looking quite attainable.  Good luck investing.  Tony

MetroPCS Update (PCS)

Looks like my PCS post turns out to be a good one, at least for the short term.  The market still is was undervaluing this company.  They are sitting on a ton of cash and have the lowest PE in their sector.  Remember this company is and should continue to make a lot of cash to reinvest in the business.  Plus at these low levels they are a prime takeover target.  I could see the takeover going for a least $10 a share!  Much upside in PCS, short and long term buy.  IMHO.  Tony

Wendys (WEN)

Finally my patience with the stock is paying off.  Stay with it for the long haul. Good luck investing.  Tony

MetroPCS (PCS)

This stock is super cheap.  I am now long PCS.  This Article says it all. Tony

June 21, 2012 by: Erik Gholtoghian  |  about: PCS, includes: S, T, VZ Fundamentally, MetroPCS (PCS) is not

the company its stock price would suggest. This may be due to a number of factors, but one of which seems to

be ignorance.

 

Markets are nearly efficient, but in some instances a brand image can overly influence investors' opinion of

a stock. Because MetroPCS has been cast by many cell phone users as an inferior network, many investors

automatically assume the stock itself is also of inferior quality. At this time, neither of those

assumptions is correct.

 

Several years back, MetroPCS did have a fairly low quality network with snail speed Internet. Calls would

occasionally drop. Callers would frequently not hear each other properly, especially deep inside of large

buildings. But even then, the network got the job done and for the correct price, all the while making the

company profit. Since then, call quality on the network has risen dramatically and Internet speed is

sufficient for even every day users. Dropped calls are rather rare, and voice quality on the newest 4G LTE

phones is nearly indistinguishable from carriers like Verizon (VZ), AT&T (T), or Sprint (S).

 

In the future, a network upgrade to VOLTE/VOIP will allow MetroPCS to offer even higher quality voice

services to its users, possibly called HD Voice, and at the same time allow a more efficient use of network

resources and spectrum.

 

All of this excellent financial and technological management has resulted in MetroPCS sitting on nearly $2

billion in cash. Because that cash is likely invested and earning less than 1% per year, and shares are

trading at a large discount, there is an argument that it could be time to finally buy back shares. Common

stock has a built in cost, and in this case that cost is in the neighborhood of 6-7% per year. Meaning, the

cost of equity is higher than the return on cash.

 

 

 

With such a massive war chest and stable business, I believe MetroPCS ought to show the market which company

actually can afford to buy MetroPCS out. And that company is none other than MetroPCS itself.

 

A share buyback would put some of the cash to work and improve company valuation. Profit and equity per

share would rise and liabilities per share would fall.

 

By offering to buy shares at $6.50 per share, using only $400 million of the nearly $2 billion in cash,

MetroPCS could buy back 61 million shares, literally 17% of all shares outstanding, and still have more than

enough money left to fight off the increasing competition and recent slowdown in profit.

 

The future is bright for MetroPCS because other options for that cash exist too. A dividend, a large network

expansion, or a buyout of a smaller company could all be announced. But in the end, a medium sized share

buyback seems to reward investors sufficiently while continuing the company's high rate of growth.

 

For comparative purposes, the chart below shows that Verizon, Sprint, and AT&T have roughly $6 billion, $7

billion, and $2.5 billion in cash, respectively. This means that MetroPCS has nearly as much cash as AT&T, a

company which is valued 95 times higher than MetroPCS.