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PreMarket Prep Stock Of The Day: AT&T Inc.

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PreMarket Prep Stock Of The Day: AT&T Inc.

Benzinga's PreMarket Prep airs every morning from 8-9 a.m. ET. During that fast-paced, highly informative hour, traders and investors tune in to get the major news of the day, the catalysts behind those moves and the corresponding price action for the upcoming session.

On any given day, the show will cover at least 20 stocks determined by co-hosts Joel Elconin and Dennis Dick along with producer Spencer Israel.

For those who don't have the time to tune in live or listen to the podcast, Benzinga will highlight one stock that merits further discussion. This analysis is not a buy or sell recommendation.

The market has seen some wicked rotation in recent days: out of the high-flying tech stocks leading the rally since March into the laggards. 

AT&T Inc. (NYSE: T) is one of the laggards firmly in the green Wednesday, making it the PreMarket Prep Stock of the Day.

AT&T In The Doghouse Since July 2016 

While the S&P 500 index has appreciated handsomely since July 2016, AT&T has gone in the opposite direction.

While the index gained 27% over that time period, AT&T lost the same amount. Of course, its hefty dividend yield has softened the blow, but certainly not enough to compensate for the discrepancy in the overall return.

AT&T Gives Back 2019 Gains In 2020 

From its 2018 year-end close of $28.54, AT&T peaked at $39.70 in November 2019 and ended the year not far off that level at $39.08, for a hefty 37% gain.

AT&T's fluctuating stock price puts its dividend yield above and below 5% throughout the year. When the 5% yield is added to the 37% principal gain, its total gain for 2019 was 42%.

In early 2020, the index continued higher, while AT&T retreated in January. The issue managed to be immune to the early part of the market meltdown, as it closed on March 4 at $38.18.

Only 11 days after closing at $38.18, AT&T flirted with a major support level of $30 when it reached $30.25 on March 18. It paused at the level for a few days, but caved in on March 20 and 23, falling from its March 19 close ($31.15) to a low of $26.08 on March 23.

That low coincided with its August 2010 low of $26.20.

AT&T's Muted Rebound

As late as May 15, AT&T closed only a few dollars off the low of the move when it ended that session at $28.31. It slowly added to its gains and ended last week at $29.88.

Over the past two sessions, it has benefited from the rotation out of tech/growth and into value, as it had added over $2 this week when it reached $31.98 earlier in Wednesday's session.

The stock was trading 3.5% higher at $31.90 at the time of publication. 

AT&T Moving Forward

Even with its gains over the last few days, AT&T still yields over 6%, and you're not going to find that rate very easily at your local bank.

Purchasing the shares at the $32 area would provide an investor a few dollars of principal protection if held for an entire year. As a result, a return to $30 over the next year would net a scratch investment,

AT&T is certainly not an investment that you're going to get rich on overnight, but one that may add some stability and income to your portfolio.

Public domain photo via Wikimedia. 

 

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