Warren Buffett Loves These 4 Communications Stocks
NEW YORK (TheStreet) -- The communications sector has been a source of much investor interest in the past year, with names like Verizon (VZ) - Get Report, Sprint (S) - Get Report, AT&T (T) - Get Report, and T-Mobile (TMUS) - Get Report as some household names.
Diversified telecommunication services stocks are up 5.93% year-over-year as of March 16, 2015, while communications equipment stocks are up 9.9%, according to Fidelity.
One investor who has a stake in the communications sector is Warren Buffett, considered the most respected and successful investor. Often called "The Oracle of Omaha" for his impressive investing prowess, he is among the world's wealthiest people.
Buffett studied under the legendary Benjamin Graham at Columbia University who had a major impact on Buffett's life and investment strategies.
Watch the video below for some interesting facts about self-made billionaire, Warren Buffett:
Buffett is chairman of Omaha, Nebraska-based Berkshire Hathaway Inc (BRK.A) - Get Report, which he built from a textile company into a major corporation with a market cap of more than $350 billion. Under Buffett's leadership, Berkshire shares averaged a 19.7% compounded annual gain in per share book value from 1965-2013.
He follows a value investing strategy that is an adaptation of Graham's approach: Discipline, patience, and value consistently outperforms the market. His moves are followed by investors worldwide. Buffett seeks to acquire great companies trading at a discount to their intrinsic value, and to hold onto them for a long time. He will only invest in businesses that he understands, and always insists on a margin of safety.
Regarding the types of businesses Berkshire likes to purchase, Buffett has said, "We want businesses to be ones that we can understand, with favorable long-term prospects, operated by honest and competent people, and available at a very attractive price."
The following are the four telecommunications stocks Warren Buffett loves, as evidenced by their presence in the top 25 holdings in his portfolio as of December 31, 2014.
4. Liberty Global PLC (LBTYA) - Get Report
Shares Held by Warren Buffett's Berkshire Hathaway: 10,816,000 shares
Value of Holdings: $543 million
Portfolio Weighting as of 12/31/2014: 0.5%
Liberty Global is an international telecommunications and television company formed by the merger of the international branch of Liberty Media and UGC in 2005.
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TheStreet Ratings team rates LIBERTY GLOBAL PLC as a Hold with a ratings score of C+. TheStreet Ratings Team has this to say about their recommendation:
"We rate LIBERTY GLOBAL PLC (LBTYA) a HOLD. The primary factors that have impacted our rating are mixed - some indicating strength, some showing weaknesses, with little evidence to justify the expectation of either a positive or negative performance for this stock relative to most other stocks. The company's strengths can be seen in multiple areas, such as its revenue growth, expanding profit margins and good cash flow from operations. However, as a counter to these strengths, we also find weaknesses including unimpressive growth in net income and generally higher debt management risk."
You can view the full analysis from the report here: LBTYA Ratings Report
3. Verizon Communications (VZ) - Get Report
Shares Held by Warren Buffett's Berkshire Hathaway: 15,001,000 shares
Value of Holdings: $702 million
Portfolio Weighting as of 12/31/2014: 0.64%
Verizon Communications is the largest U.S. wireless communications service provider as of September 2014.
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TheStreet Ratings team rates VERIZON COMMUNICATIONS INC as a Hold with a ratings score of C+. TheStreet Ratings Team has this to say about their recommendation:
"We rate VERIZON COMMUNICATIONS INC (VZ) a HOLD. The primary factors that have impacted our rating are mixed - some indicating strength, some showing weaknesses, with little evidence to justify the expectation of either a positive or negative performance for this stock relative to most other stocks. The company's strengths can be seen in multiple areas, such as its revenue growth, notable return on equity and expanding profit margins. However, as a counter to these strengths, we also find weaknesses including deteriorating net income, generally higher debt management risk and weak operating cash flow."
You can view the full analysis from the report here: VZ Ratings Report
2. VeriSign (VRSN) - Get Report
Shares Held by Warren Buffett's Berkshire Hathaway: 12,985,000 shares
Value of Holdings: $740 million
Portfolio Weighting as of 12/31/2014: 0.68%
VeriSign is an Internet and communications company that operates network infrastructure, including two of the Internet's thirteen root nameservers.
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TheStreet Ratings team rates VERISIGN INC as a Buy with a ratings score of B-. TheStreet Ratings Team has this to say about their recommendation:
"We rate VERISIGN INC (VRSN) a BUY. This is driven by several positive factors, which we believe should have a greater impact than any weaknesses, and should give investors a better performance opportunity than most stocks we cover. The company's strengths can be seen in multiple areas, such as its revenue growth, expanding profit margins, good cash flow from operations and solid stock price performance. We feel these strengths outweigh the fact that the company has had sub par growth in net income."
You can view the full analysis from the report here: VRSN Ratings Report
1. Charter Communications (CHTR) - Get Report
Shares Held by Warren Buffett's Berkshire Hathaway: 6,198,000 shares
Value of Holdings: $1.033 billion
Portfolio Weighting as of 12/31/2014: 0.94%
Charter Communications is the fourth-largest cable television operator in the U.S. The company provided cable television, high-speed Internet, and telephone services to more than 27.6 million customers in 29 states in 2013.
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TheStreet Ratings team rates CHARTER COMMUNICATIONS INC as a Hold with a ratings score of C. TheStreet Ratings Team has this to say about their recommendation:
"We rate CHARTER COMMUNICATIONS INC (CHTR) a HOLD. The primary factors that have impacted our rating are mixed - some indicating strength, some showing weaknesses, with little evidence to justify the expectation of either a positive or negative performance for this stock relative to most other stocks. The company's strengths can be seen in multiple areas, such as its revenue growth, solid stock price performance and expanding profit margins. However, as a counter to these strengths, we also find weaknesses including deteriorating net income, generally higher debt management risk and disappointing return on equity."
You can view the full analysis from the report here: CHTR Ratings Report