From Seekingalpha · Investing Experts Podcast · · 2m
SpaceX Telecom Sell-Off and Micron's Strong Buy
SpaceX's $8B spectrum deal sparks telecom stock sell-off as Micron maintains strong buy rating.
In brief
SpaceX's $8B spectrum deal sparks telecom stock sell-off as Micron maintains strong buy rating. SpaceX's acquisition of telecom spectrum causes telecom stocks to drop while Micron retains a strong buy rating based on positive earnings performance and analyst revisions. Originally reported by Seekingalpha.
SpaceX's $8B Spectrum Deal
SpaceX's $8 billion deal to buy a nationwide low-band spectrum portfolio sparked a sudden sell-off in major telecom stocks.
“Grain Management said in a statement that SpaceX will acquire 100% of Grain's nationwide spectrum portfolio.”
Telecom Stocks Dip
T-Mobile, Verizon, and AT&T shares all dropped in pre-market action following the announcement.
“T-Mobile pre-market now down nine percent.”
Starlink Mobile Network
Starlink can provide spectrum that's easily accessible and compatible with many phones, but indoor service is limited.
“It does not work indoors, even on airplanes.”
Micron's Strong Buy Rating
Micron maintains a Quant Strong Buy rating supported by A grades in valuation, growth, profitability, and momentum.
“Micron (MU) maintains a Quant Strong Buy rating, supported by A grades in valuation, growth, profitability, and momentum.”
Analyst Revisions
13 analysts revised Micron's earnings estimates up for the fiscal year, with only one down.
“For the fiscal year, 13 analysts revised their estimates up. And only one revised it down.”
Earnings Performance
Micron has consistently beaten earnings since Q3 2.023, with recent quarters showing extreme growth.
“They've beaten every time since the third quarter of 2023.”
Quantitative Analysis
The Quant system evaluates stocks using five core investment characteristics: value, growth, profitability, momentum, and revisions.
“We look at those five core investment characteristics, where I refer to really as a GARP approach.”
Quant Strong Buy Performance
Seeking Alpha's Quant strong buys have outperformed the S&P 500 by 166% over the last five years.
“Seeking Alpha Quant strong buys are up 166% compared to Wall Street up about 17%.”
Apple Stock Reaction
Apple shares dropped 2.4% on news of reduced iPhone component production, trading at a 68% premium to the sector.
“Apple is trading at 38 times versus the sector at 22 times.”
Meta's Ad Ban
Meta Platforms banned advertisements from TikTok parent company ByteDance across its platforms in the US and six other countries.
“Meta Platforms (META) has banned advertisements from TikTok parent company ByteDance (BDNCE) across its platforms in the US and six other countries.”
Quantitative Ratings
Quantitative ratings provide an instant characterization of how a company looks on value, growth, or profitability compared to the sector.
“Those factor grades give you an instant characterization of how a company looks on value, growth, or profitability compared to the sector.”
T-Mobile's Defense
T-Mobile argues that satellite to phone connectivity is primarily an edge service, while terrestrial 5G networks remain superior for routine indoor usage.
“T Mobile argues that satellite to phone connectivity is primarily an edge service, whilst terrestrial 5G network remains a superior option for routine mobile usage indoor coverage.”
Starlink's Limitations
Starlink's service is limited to outdoor use and does not work indoors, even on airplanes.
“It does not work indoors, even on airplanes.”
Quantitative System
The Quant system uses systematic models to generate investment research reports based on data-driven analysis.
“We took the systematic models that I had developed for my hedge fund and largely what I ran at Morgan Stanley.”
Apple's Stock Performance
Apple has a quant hold rating due to expensive valuation and limited growth potential.
“We view the stock as very expensive with limited growth.”
Market Reaction
The market reacted positively to SpaceX's announcement, with tech stocks bouncing back after a previous sell-off.
“For the most part, a lot of the technology stocks that sold off yesterday that are AI related are bouncing back this morning.”
The main idea
SpaceX's acquisition of telecom spectrum causes telecom stocks to drop while Micron retains a strong buy rating based on positive earnings performance and analyst revisions.
