Two Wireless Stocks to Avoid

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Sometimes it seems as if the human species has transmogrified into creatures with mobile phones permanently attached to their heads. The ubiquity and overuse of the devices might fool an investor into believing that any company involved in that industry is a steady "consumer staple" play that can't miss, regardless of the vicissitudes of the economy. But there are some wireless communications firms whose stocks are best ignored for now, and Sprint Nextel (S Quote) and USA Mobility (USMO Quote) head the list.

Sprint has been steadily losing market share to telecom heavyweights AT&T (T Quote) and Verizon Communications (VZ Quote) with little indication that it can reverse the trend. Sprint's revenue slipped 2.1% in fiscal 2007 and skidded 10.9% in the second quarter of 2008 compared with the year-earlier period.

In 2007 Sprint wrote off $29.7 billion of good-will associated with its megamerger with Nextel -- an indication that that the combination wasn't a marriage made in heaven. That helped drive down earnings, including extraordinary items, from 45 cents a share in 2006 to a loss of $10.31 a common share.

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