Insider Activity Report: AT&T (T)

Stephen Luczo, a director at AT&T (T), recently bought 62,500 shares. The buy increased his stake by 13 percent, and came to a total cost of $971,875.

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  • This marks the only insider activity at the telecom company over the past two years, and well after AT&T has spun off its entertainment division, reduced its dividend, and moved back to having a core focus on the telecom sector.

    Overall, AT&T insiders own 0.1 percent of shares.

    The telecom has struggled this year. Revenues are up just 1 percent, and earnings are off by 42 percent.

    Even with that operational performance, market expectations have been low. Shares trade at 6 times forward earnings. Plus, shares trade just above book value, a conservative measure of the company’s assets.

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  • Action to take: Long-term investors may like shares here. They’re well off their 52-week lows and trending higher. The stock may finally be setting up for longer-term gains as it focuses on being a telecom play.

    While AT&T cut their dividend, at current prices, shares still yield just over 7 percent. That’s a high enough payment to entice investors holding for a longer-term trend higher.

    For traders, the January $16 calls, last going for $0.42, are a near-the-money trade. They should see mid-to-high double-digit returns on a year-end rally taking shares higher, and stand a strong chance of moving in-the-money.


    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.

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