The Sunday Brief

Connecting technology, telecommunications, and the internet

Value Creation – Long-term charts, Fab Five vs. Telco Top Five (Nov 17)

by | Nov 18, 2023 | TSB

This was another positive week for the Fab Five (+$121 billion overall, each stock higher except for Microsoft, worst stock up 46% thus far in 2023). This group of five stocks has gained over $1 trillion since the market opened on October 30th. While many other indices have gained since late October (e.g., the Russell 2000 is up 4% over the last month), the sheer magnitude of the Fab Five gain is unprecedented.

As we have seen in countless prior years, this is about the time that some growth and income funds look at AT&T and Verizon and begin to add them to their portfolios. 2023 is following that pattern with both stocks adding $2 billion in value this week. A quick read of the 13F filings (which disclose changes in positions for larger shareholders) indicates that there have been no material changes in Verizon holdings except for BofA, who sold 42% of their Verizon stake (details here).

AT&T has some fans, however. Fidelity and Ameriprise (now the tenth and eleventh largest shareholders of Ma Bell) more than doubled their stakes in 3Q 2023. With T-Mobile USA largely held by their German parent (and Softbank), and with Liberty Media holding around a quarter of Charter stock, there is little room for large movements in either of those stocks.

The story has not changed a lot for the Telco Top Five. Cable continues to be strong, and traditional incumbent telcos are weak. And, as we have mentioned in many Briefs, if you think AT&T and Verizon are having a bad 2023, don’t look at Lumen (-74% in 2023), Altice (-50%) or Dish (-75%). The undercard is ugly and could get uglier in 2024.

Finally, I posted the following notice I received as a Spectrum Mobile Unlimited Plus customer:

As discussed on my LinkedIn post, this change will not impact gross adds or churn unless Spectrum is seeing more customers share their iPhone screens on larger TVs (and therefore devalue linear video even further). If you have Apple TV and have not used the AirPlay feature, Apple has easy to follow instructions here. We clearly understand why Spectrum would reset the default to 480p (roughly 3 Mbps) from 720p (roughly 5 Mbps), but that doesn’t mean that we have to embrace the change. More on my Spectrum mobile experience (which is really a reflection of the Verizon network as our Eero Wi-Fi is fantastic as is Spectrum Fiber) in two weeks.

File is below. Send any comments or suggestions to sundaybrief@gmail.com. This is a big sports weekend for Kansas City – Go Sporting KC and Go Chiefs!

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