Comcast and Other Wireless Stocks Worth a Look Now

In their just released report on the results of an analysis of first-quarter earnings from communication and wireless stocks, Oppenheimer analysts suggest that social networking, mobile video and online gaming will continue to boost the growth of wireless data and cloud services providers. The three top picks from the Oppenheimer list of communications and wireless stocks to buy were Akamai Technologies AKAM, American Tower AMT and Comcast CMCSA. Below is a quick look at how these three stocks have fared and what analysts expect from them. Other communications and wireless stocks on the Oppenheimer list include AT&T T, Crown Castle International CCI and Verizon Communications VZ. Akamai Technologies This provider of Internet content delivery and cloud infrastructure services sports a market capitalization of about $8.5 billion and it is headquartered in Cambridge, Massachusetts. It offers no dividend. The long-term earnings per share (EPS) growth forecast is more than 13 percent, though the return on equity is only about 10 percent. The price-to-earnings (P/E) ratio is higher than the industry average, but so is the operating margin. The short interest in Akamai Technologies was more than 10 percent of the float as of the April 30 settlement date. That was the second highest number of shares sold short in at least a year. Days to cover fell from more than six in the previous period to less than four. Nine of the 25 analysts that follow the stock and were polled by Thomson/First Call rate the stock at Strong Buy, and six others also recommend buying shares. The mean price target, or where the analysts expect the share price to go, is less than the current share price. So the consensus is that there is no upside potential at this time. Shares have surged more than 37 percent in the past month and reached a 52-week high yesterday. Over the past six months, the stock has outperformed competitor Level 3 Communications LVLT and the broader markets. American Tower This wireless and broadcast communications infrastructure company has a market cap of more than $33 billion and a dividend yield near 1.3 percent. Its long-term EPS growth forecast is more than 21 percent, but the P/E ratio is higher than the industry average. The return on equity is more than 16 percent. American Tower is expected to post strong EPS and revenue growth for the current quarter. The short interest in this Boston-based company was about one percent of the float at the end of April. The number of shares sold short has been decreasing since mid-March and was the lowest since the end of January. The days to cover remained at more than two. All but four of the 22 analysts surveyed recommend buying American Tower shares, with six of them rating the stock at Strong Buy. They think the shares have some head room as their mean price target is about eight percent higher than the current share price. That target would be a new multiyear high. The share price is more than 12 percent higher than at the beginning of the year, though it has faced resistance above $84 for the past three weeks. However, over the past six months, the stock has underperformed smaller competitor Crown Castle, as well as the broader markets. Comcast The largest cable operator and third-largest home phone service provider in the United States is headquartered in Philadelphia. It has a market cap of more than $111 billion and a dividend yield near 1.8 percent. The long-term EPS growth forecast is about 17 percent. The return on equity is less than 13 percent, but the operating margin is greater than the industry average. The number of Comcast shares sold short as of the most recent settlement date represented about one percent of the total float. That was lowest level of short interest since mid-February, which was the lowest in the past year. And the days to cover dropped to less than two in the most recent period. Only seven of the 30 polled analysts do not recommend buying shares. None of them recommends selling. The mean price target suggests they see more than 10 percent upside potential. And that target would be a new multiyear high as well. The share price is about 11 percent higher year-to-date after pulling back about two percent from a 52-week high earlier this week. The stock has outperformed rival Dish Network DISH but has underperformed DirecTV DTV over the past six months.