4-Star Stocks Poised to Pop: MetroPCS
Based on the aggregated intelligence of 180,000-plus investors participating in Motley Fool CAPS, the Fool's free investing community, wireless telecom carrier MetroPCS Communications (NYS: PCS) has earned a respected four-star ranking.
With that in mind, let's take a closer look at MetroPCS' business and see what CAPS investors are saying about the stock right now.
|Market Cap||$3.01 billion|
|Industry||Wireless telecommunication services|
|Trailing-12-Month Revenue||$4.67 billion|
|Management||Founder/Chairman/CEO Roger Linquist|
President/COO Thomas Keys
|Return on Equity (Average, Past 3 Years)||8.3%|
|Cash/Debt||$2.14 billion / $4.77 billion|
|Competitors||AT&T (NYS: T) |
Sprint Nextel (NYS: S)
Verizon Communications (NYS: VZ)
Sources: S&P Capital IQ and Motley Fool CAPS.
On CAPS, 93% of the 465 members who have rated MetroPCS believe the stock will outperform the S&P 500 going forward. These bulls include Palido and All-Star JTMcGee, who is ranked in the top 5% of our community.
Earlier this fall, Palido listed a few of MetroPCS' positives: "Cheap, strong earnings growth, future upside potential growth with move into 4G and smart phone offerings."
Over the next five years, in fact, MetroPCS is expected to grow its bottom line at a brisk rate of 27% annually. That's much faster than that of rivals AT&T (3%), Sprint (5%), and Verizon (12%).
CAPS All-Star JTMcGee elaborates on the bull case:
I tend to shy away from companies without a long-term economic moat -- those without a real competitive advantage.
However, I am a fan of acquisition targets in any space, and this firm is definitely a takeover target. At present valuation, the company is very cheap. Its assets are also increasing in value with each day as more customers join this tiny player.
People miss the beauty in firms like this. When the economy performs poorly, consumers switch to prepaid cellular devices. However, when the economy strengthens, those who couldn't afford a phone at all also go to prepaid services.
I see competitors in this space cannibalising their own pre-paid customers to maintain margins on subscription plans. Their customers who wish to remain on a prepaid plan will seek other options.
I like this as a five-year outperform.
What do you think about MetroPCS, or any other stock for that matter? If you want to retire rich, you need to put together the best portfolio you can. Owning exceptional stocks is a surefire way to secure your financial future, and on Motley Fool CAPS, thousands of investors are working every day to find them. CAPS is 100% free, so get started!
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At the time this article was published Fool contributor Brian Pacampara owns no position in any of the companies 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 Fool's disclosure policy always gets a perfect score.
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