While the market has held up well thanks to the strong performance of tech stocks, that trend won’t last. It’s possible the overall market could decline as tech stocks shift lower. But we could also see a rotation out of tech and into other sectors.
That’s why several parts of the market look attractive now. Many sectors didn’t join the market’s rally, or have since moved to re-test lows from last year. They could be a potential buy.
For instance, the telecom stocks have been poor performers, in part due to rumors that
Amazon (AMZN) would offer such service for its Prime members.
That’s sent the space lower. But that’s creating an opportunity to buy now.
AT&T (T), one of the biggest players, is going for less than 7 times forward earnings. And shares trade for less than 1 times their price-to-sales. It’s no wonder the company is getting upgraded now.
Action to take: Besides having the potential for a double-digit upside in the coming months, shares yield about 7.2 percent at current prices. That will pay investors well, whether the market heads lower or not.
For traders, the October $18 calls, last going for about $0.17, are inexpensive enough to return high-double-digits in the coming months on a rebound in shares.
Disclosure: The author of this article has no position in the company mentioned here, but may trade after the next 72 hours. The author receives no compensation from any of the companies mentioned in this article.
