The Sunday Brief

Connecting technology, telecommunications, and the internet

Value Creation – Long-term charts, Fab Five vs. Telco Top Five (Nov 3)

by | Nov 4, 2023 | TSB

As we have seen in many post-earnings periods, the Fab Five had a big bounce back (+$541 billion). Expectations are largely met, and short sellers have their 1-2 day “spooky” period, but then stocks recover. Many are expecting a Holiday rally, but just like in retailing, the good deals may already be here.

The Fab Five are up a whopping $3.15 trillion year-to-date. This is impressive given the turmoil in the international events and relative dollar strength (the dollar index is up materially since mid-summer – chart here).

What really caught our eye was the recovery in the Telco Top Five (+$48 billion) with each stock gaining value this week. Verizon and Comcast were the biggest winners, up $9 billion and $14 billion respectively, but there was strength across the board. The $48 and $33 billion (2-week market cap gain) figures are the best since the beginning of 2023. All Telco Top Five were up this week, another rarity.

That was not the case with the telecom undercard. Lumen had a rough week (down as much as 33% mid-week but only 16% by Friday), and Altice only gained 7% after a very good earnings report. Lumen announced a partial debt restructuring, pushing maturies out and interest rates higher. We don’t hold out hope for a quick stock price recovery.

Finally, here’s a thoughtful analysis on the tax loss for Washington state from Amazon founder Jeff Bezos’ decision to move to Florida from our friends at Business Insider.

Have a great remainder of the weekend! File is below, and has been updated for end of Sept share counts and we have added the latest net debt levels on the second tab. One interesting note is that Microsoft was already in the process of beefing up its cash levels at the end of September (the deal finally closed in mid-October).

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