Chief telecom analyst,
Credit Suisse First Boston
CATEGORY: Telecom services
STOCK PICKS: AT&T (T), Sprint (FON),Bell Atlantic-GTE (BEL-GTE)
WHY: Daniel P. Reingold, an influential analyst who has been researching the stock market for 10 years, has seen bloody routs before. They don't scare him. "There have been seven major sell-offs since the divestiture of AT&T in 1984," he says. "Enormous money has been made by people who bought in the face of fear."
Now, he says, it's time to face down the fear and buy. Among his top picks: bellwether AT&T. The company's stock is off 30% for the year, after it warned that revenues and earnings won't meet projections for the year. But Reingold thinks AT&T's stock, now $35, can hit $84 over the next 12 months. That's because AT&T should see surging revenues from the sale of high-speed Net connections, and it's likely to create a tracking stock for its cable-TV unit.
Reingold thinks Sprint Corp. is another good choice. The company's stock is down 11% this year, largely on concerns that regulators may stop WorldCom Inc. from buying the company. Reingold believes the deal probably will go through--in which case Sprint's stock will be a big winner. Even if it doesn't, Sprint will still be fine because another suitor will swoop in. Reingold expects Sprint's stock to hit $114 within a year, up from $60 now.
The case for Bell Atlantic and merger partner GTE Corp. is based on several factors. Together, they should see accelerating growth as GTE becomes better positioned to sell data services to corporations in Bell Atlantic's eastern territory. What's more, initial public offerings for GTE's Internet unit and the combined companies' wireless business should be a boon for the parent companies. Reingold sees Bell Atlantic's stock going to $99, up from $52, and GTE's stock hitting $113, up from $62.