Scott Moritz
Telecom stocks continue to tack on gains in a topsy-turvy market.
Wall Street hasn't exactly found an abundance of winning themes this year. Gold stocks couldn't keep their luster, retailers are boxed in and there's been a run on the brokerage stocks lately. But resourceful investors have found both comfort and reward in the big-phone and cable sector, where just a few years ago great fortunes vanished. New York phone titan Verizon (VZ Quote - Cramer on VZ - Stock Picks) saw its shares hit a 52-week high Tuesday. And Bell peers AT&T (T Quote - Cramer on T - Stock Picks) and BellSouth (BLS Quote - Cramer on BLS - Stock Picks), effectively bound together in a pending merger, are near four-year highs. Even cable giant Comcast (CMCSA Quote - Cramer on CMCSA - Stock Picks) has jumped 35% this year. Clearly, the rounds of consolidation after the great telecom collapse at the turn of the century have helped the industry regain its footing. Fans point out that a crowd selling similar services has now shrunk to just a few top players. Meanwhile, network use has surged, fed by wireless and data traffic. And the days of steeply eroding long-distance prices have largely given way to fixed monthly rates on unlimited calling plans. "They have become good defensive stocks," one New York hedge fund manager says of the phone and cable companies. Defensive plays are investments that tend to hold on to their value during downturns better than so-called cyclical companies, whose fortunes rise and fall with economic growth.
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