Stock Picks – August 13, 2018

Stock pick

I believe one of the best deals currently is AT&T (NYSE:T 33.93 -0.19 -0.56%). When something thinks of AT&T they typically think of a telecommunication company, which sells cell phone service, telephone lines, fiber connections, perhaps satellite TV (DirecTV), cable TV, and over the top TV (DirecTV Now and Watch TV). In other words AT&T is a content connector. They connect you to content.

And this assessment of AT&;T would be right, if this was still May. In June, AT&T morphed from being a content connector into being a content connector AND a content provider with the purchase of Time Warner (known post merger as Warner Media). AT&T now owns power house brands such as HBO, Cinemax, Turner Broadcasting (TBS, TNT, CNN, Turner Classic Movies, Cartoon Network, Bloomberg, and TruTV) , Warner Brothers (one of the big 6 film studios), DC Entertainment/ DC Comics, and much more. They operate NBA.com and NBA TV, NCAA.com, PGATour.com, PGA.com, and much more.

Check out this list of assets now owned and controlled by AT&T.

This merger now makes AT&T the 5th largest company in the United States, and one of the largest in the world. However, Wall Street, while knowing about the merger doesn’t seem to understand what AT&T just did and the moat they just created. For a quick exercise look up T on the stock brokerage of your choice and read the company profile. There is basically no mention of the WarnerMedia subsidiary. Basically Wall Street is comparing them to Verizon (VZ 55.13 +0.19 +0.35%), Centurylink (CTL 21.04 -0.22 -1.03%), etc, when really they are a combination of Verizon and Disney (DIS 116.24 -0.70 -0.60%).

AT&T closed slightly down on Friday to $32.26 a share. They are down -15.6% over the last 52-weeks, and nearly at their 52-week low. They are slightly above their 90-day moving average ($31.87) and below their 200-day moving average ($34.11).

AT&T pays an amazing dividend of $2 per year (current yield 6.17%), which they have continuously paying (and increasing) for the past 34-years!
This is the second time I am choosing T as a MikesStockPick. I previously purchased shares for $31.07 in July and for $31.965 in August.

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Stock Picks – July 26, 2018

Stock Pick # 1

I recently purchased shares of MongoDB Inc ((MDB 73.45 -0.51 -0.68%). MongoDB Inc was originally founded in 2007 and is the developer of the MongoDB database. I use MongoDB in some of the technology that I sell and service and their popularity continues to grow. They are still a small company but growing fast, having basically doubled year to date in 2018 and I believe this growth is not slowing down, but will continue for many years. I paid $57.54 a share.

Stock Pick # 2

Yesterday I purchased shares of Beasley Broadcast Group Inc (BBGI 6.56 -0.27 -3.95%), a large radio station ownership group. They were originally founded in 1961 and have been publicly traded since 2000. Beasley owns and operates 65 stations in 13 radio markets, including Las Vegas (where they have 5 radio stations). Their stock has recently fallen on news that one of their major shareholders was selling a bunch of stock, below what the market price was at the time, to help fund the purchase of a new radio station. Investors seemed worried that the stock would get diluted with a new offering, but it was as not a new offering this seemed to be a case of market over reaction. I purchased it for $6.90 per share.

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Stock Picks – July 23, 2018

Stock Pick # 1

Today I purchased shares of telecom giant AT&T (T 33.93 -0.19 -0.56%). AT&T is currently paying a 6% dividend and has been continuously paying and growing this dividend for the last 34 years! Once its merger of Time Warner is finally complete, AT&T will be the 5th largest company in the United States. AT&T reports on their 2nd quarter earnings tomorrow and it will be the first quarter that will include financial information for Time Warner. With the purchase of Time Warner, AT&T is setting themselves up as a content creator. In many ways it seems like AT&T is becoming more like media giant Disney (DIS 116.24 -0.70 -0.60%), instead of simply a telecom giant.

I believe that the market will be pleasantly surprised with their earning report tomorrow and we will see a large jump in their stock price. I purchased shares for $31.07. However, I am also hedging my bets as I have another order in at $28.09 as one area of concern to me is the amount of debt that AT&T has, however I do not believe they are over leveraged at this time. But Mr. Market may decide tomorrow that they are over leveraged and will cause a large price reduction. Should that happen, I’ll buy some more on sale.

Stock Pick # 2

In my IRA I purchased shares of Main Street Capital (MAIN 37.68 -0.28 -0.74%). Main Street is a business development companies (“BDC”) who makes loans to small and lower mid market businesses in exchange for an equity position in their company. They have investments in a wide variety of businesses and have had good returns from their investments. They pay nearly a 6% dividend, but rather than paying it 4 quarterly installments as most companies do, they pay it in monthly installments! I paid $39.35 a share.

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