Telecom Stocks are Rising

Shares of Verizon Communications, Sprint, and T-Mobile are all rallying as the Dow Jones is largely flat.

Feb 27, 2014 at 11:20AM

The Dow Jones Industrial Average (DJINDICES:^DJI) was up 44 points at 11:30 a.m. after starting the day's trading session flat  Dow Jones component Verizon Communications (NYSE:VZ) was up nearly 2% early in the session, while rivals T-Mobile (NASDAQ:TMUS) and Sprint (NYSE:S) were also rising more than 2% early in the trading session.

Fed says taper will continue
Federal Reserve head Janet Yellen's morning testimony on Capitol Hill may have helped to keep the markets muted. Yellen told the Senate banking panel that the Fed would likely continue to curtail its asset purchases in future months, gradually winding down its expansionary monetary policy.

While the central bank's willingness to curtail asset purchases suggests that the U.S. economy is strengthening, it's not necessarily great for the stock market. The market's rally in recent years has coincided with the Fed's aggressive monetary stimulus, and cutting back on that program (bond buying is already down from $85 billion monthly to $65 billion) could lead to a drop in stock prices.

Verizon outperforming the Dow
Verizon was one of the Dow Jones' best-performing components early on Thursday, with a modest rally that was still quite significant for the $134 billion company. There wasn't much news to explain the move higher, but a few reports could be in the mind of Verizon investors.

Yesterday, The Wall Street Journal reported that Verizon is helping to investigate two possible security breaches at unidentified retailers. Verizon itself was not hacked, but is helping to ascertain the situation. Also, earlier in the week, Verizon's CEO made some comments regarding Internet usage, arguing that Netflix would have to strike a deal with Verizon to deliver its video content, and that heavy Internet users could have to pay Verizon more for their FiOS Internet service.

A Sprint/T-Mobile merger might be back on the table
Earlier in the week, T-Mobile shares tumbled after the company posted earnings that fell short of analyst expectations. The wireless carrier's move higher on Thursday may simply be a bounce back from the week's low.

Or it could be something more substantial -- perhaps speculation that the company's long-rumored merger with Sprint could happen. CNBC's Jim Cramer said early on Thursday that a Sprint/T-Mobile tie-up remained possible, creating a major third player to challenge Verizon and AT&T. Also, earlier this week, Dish Network's Charlie Ergen said his company would not meddle with a T-Mobile/Sprint deal. Dish Network has been trying to break into the wireless industry for some time; last year, Dish tried (and failed) to merge with Sprint.

Regulators, however, could block the deal, as they did with AT&T's attempt to acquire T-Mobile. Still, it appears investors are hopeful.

Our top stock pick for 2014
There's a huge difference between a good stock and a stock that can make you rich. The Motley Fool's chief investment officer has selected his No. 1 stock for 2014, and it's one of those stocks that could make you rich. You can find out which stock it is in the special free report "The Motley Fool's Top Stock for 2014." Just click here to access the report and find out the name of this under-the-radar company.

Sam Mattera has no position in any stocks mentioned. The Motley Fool has no position in any of the stocks mentioned. Try any of our Foolish newsletter services free for 30 days. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.

4 in 5 Americans Are Ignoring Buffett's Warning

Don't be one of them.

Jun 12, 2015 at 5:01PM

Admitting fear is difficult.

So you can imagine how shocked I was to find out Warren Buffett recently told a select number of investors about the cutting-edge technology that's keeping him awake at night.

This past May, The Motley Fool sent 8 of its best stock analysts to Omaha, Nebraska to attend the Berkshire Hathaway annual shareholder meeting. CEO Warren Buffett and Vice Chairman Charlie Munger fielded questions for nearly 6 hours.
The catch was: Attendees weren't allowed to record any of it. No audio. No video. 

Our team of analysts wrote down every single word Buffett and Munger uttered. Over 16,000 words. But only two words stood out to me as I read the detailed transcript of the event: "Real threat."

That's how Buffett responded when asked about this emerging market that is already expected to be worth more than $2 trillion in the U.S. alone. Google has already put some of its best engineers behind the technology powering this trend. 

The amazing thing is, while Buffett may be nervous, the rest of us can invest in this new industry BEFORE the old money realizes what hit them.

KPMG advises we're "on the cusp of revolutionary change" coming much "sooner than you think."

Even one legendary MIT professor had to recant his position that the technology was "beyond the capability of computer science." (He recently confessed to The Wall Street Journal that he's now a believer and amazed "how quickly this technology caught on.")

Yet according to one J.D. Power and Associates survey, only 1 in 5 Americans are even interested in this technology, much less ready to invest in it. Needless to say, you haven't missed your window of opportunity. 

Think about how many amazing technologies you've watched soar to new heights while you kick yourself thinking, "I knew about that technology before everyone was talking about it, but I just sat on my hands." 

Don't let that happen again. This time, it should be your family telling you, "I can't believe you knew about and invested in that technology so early on."

That's why I hope you take just a few minutes to access the exclusive research our team of analysts has put together on this industry and the one stock positioned to capitalize on this major shift.

Click here to learn about this incredible technology before Buffett stops being scared and starts buying!

David Hanson owns shares of Berkshire Hathaway and American Express. The Motley Fool recommends and owns shares of Berkshire Hathaway, Google, and Coca-Cola.We Fools don't all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.

©1995-2014 The Motley Fool. All rights reserved. | Privacy/Legal Information