As investors, aren't we supposed to be rewarded for catching hot trends early? Apparently not. One of the most frustrating aspects of buying into the wireless sector is that, while the market has been growing, the same can't be said for its key players.
No. The market can't hear you now. Care to speak up, please?
It's a fatal mistake. Guessing right on a trend but poorly on the competitive state and margin-munching pressures of a growing field will close the book on even the meatiest story stocks.
It may not get better in the near term. Next month the number portability rule kicks into effect. Cellular phone users will be able to switch carriers while keeping their telephone numbers. That gives customers one less reason not to shop around, and churn will climb. It will also make the entire sector more susceptible to price wars, which is already a problem.
So while Verizon Wireless -- a joint venture with Vodafone
And despite growth in long-distance and broadband, Verizon's flagship local telephone business suffered a 4% dip. If investors are drawn in by the fact that Verizon trades at just 13 times its own profit guidance for this year, it woudn't be the first time value hunters shot themselves in their collective feet.
Aim better. Aim somewhere else.