NEW YORK ( TheStreet) - After missing out on the sweepstakes for pre-paid telecom carrier MetroPCS ( PCS), speculation centered on whether Sprint Nextel ( S) would jump in with a counter bid or be left without a partner to tap the surge in data loads from Apple ( AAPL) and Google ( GOOG)-operated smartphones. Now, strong indications that Japan's Softbank may buy Sprint outright signal the industry's third carrier may not enter the telecom sweepstakes at all.

It's not the first time speculation on Sprint's fate has been misguided, and Thursday's reports of a possible takeout valued at nearly $13 billion signal investors may yet want to bury their head in the sand and focus on the company's standalone prospects.

Such a perspective might clear the air on Sprint's true worth, while helping investors make their way through expected tectonic shifts in the wireless market by year-end.

Earlier in the year, when Sprint's shares were near 2012 lows, some analysts and investors questioned whether the company would fall to bankruptcy. A subsequent doubling in the company's stock in the past six months on operating performance improvements and readily available financing has put a lid on harbingers of doom. Then, amid rampant M&A speculation, investors began handicapping Sprint's chances at buying also-ran carriers like MetroPCS and Leap Wireless ( LEAP), which have millions of subscribers, or DISH Network ( DISH), which holds valuable wireless assets.

Instead, Sprint now looks to be a takeout target - a premise few considered possible after the U.S. Department of Justice blocked consolidation efforts by industry-leading carriers like AT&T ( T).

With signals now indicating Sprint won't be a victim of bankruptcy or an acquirer, investors may be wise to simply focus on whether they'd invest in the company's forecast operating performance and its plans to compete in the ultra competitive wireless market.

As Sprint plows billions into a 4G wireless plan and a rollout of unlimited data use Apple iPhone contracts, the company's remained on track to go from worst to first as a stock performer in the fast-moving sector.

Organic stock gains, driven by operating margin improvements and a forecast turn to profitability in coming years, may yet be more attractive than a takeout at a modest premium to market prices and M&A efforts that may dilute shareholders. Sprint shares generally stumble when the company is mentioned as an acquirer.

The biggest question for investors should be whether the company's forecast execution of its 4G wireless rollout - called Network Vision - and its unlimited iPhone data plan, is a winning formula, over any takeout offer. That's especially the case given the reported underwhelming terms of Softbank's play for Sprint.

On reports of the Softbank deal, Sprint shares are up over 11% in afternoon trading to $5.61, adding to 2012 stock gains in excess of over 100%.

Softbank's reported offer would represent, at maximum, a $6 share price, according to Evercore Partners analysts, which would come at a single digit premium to Sprint's 2012 stock highs. Meanwhile, Jonathan Schildkraut of Evercore writes in a research note to clients that Softbank's deal would do little to alter Sprint's fundamental challenges, except to give it a deep pocketed financial backer.

While reports range greatly on Softbank's share stake proposal, Craig Moffett of Bernstein Reseach notes the expected takeout offer gives Sprint little credit for its in-process wireless network upgrade. " It is noteworthy that none are particularly aggressive if one assumes successful execution of Network Vision and realization of the EBITDA benefits that seem widely expected in 2014E," writes Moffett, in a note to clients.

On the heels of MetroPCS and T-Mobile's announced merger earlier in October, Citigroup analyst Michael Rollins added Sprint to the bank's "Most preferred List" of stocks, advocating that investors consider a pair trade where it outperforms MetroPCS through year-end.

Citigroup's bullishness on Sprint is predicated on expected improvements in the company's operating margins and its eventual success in building out a viable nationwide network.

" We believe the core investment thesis for Sprint remains centered around the prospects to restructure its network architecture and improve margins," wrote Citigroup's Rollins in a note to clients, assessing the impact on Wednesday's mega-merger. Rollins highlights improving finances and annual operating income growth of over 25% in the next two years as reason to expect Sprint can turn profitable and generate 65 cents in 2014 earnings per share.

Those betting on Sprint's outperformance and green shoots on its network upgrade have already been rewarded. Hidden in telecom M&A speculation is Sprint's performance as it remains on track to go from worst to first as a stock performer in the sector.

In 2011, Sprint shed more ground than any telecom within the S&P 500 Index, losing over 44% in share value, according to Bloomberg data. Now, as worst case fears like bankruptcy recede according to even bearish analyst estimates, Sprint remains on track to be the top performer in the telecom sector in 2012, beating out 40%-plus 2012 gains posted by Crown Castle ( CCI), and dramatically outperforming double digit stock gains posted by larger rivals AT&T ( T) and Verizon ( VZ).

In fact, for those looking to play the telecom M&A guessing game on the heels of reports Sprint may be taken out, they may be rewarded by looking at second order impacts instead of nailing down the price of the deal.

Moffett of Bernstein Research highlights that the obvious winners in a deal would be Spirnt and its 4G wireless partner Clearwire ( CLWR), while losers would be MetroPCS, Leap Wireless and DISH Network, given some expectations Sprint would acquire one of the companies. For AT&T and Verizon, a better capitalized Sprint might up the competition. "Incremental funding for Sprint would, in theory, re-invigorate Sprint, amplifying competitive pressure industry-wide," writes Moffett.

For telecom sector investors, Sprint's push from worst to first may now be about whether the company can execute on its Network Vision upgrade and take on smartphone subscribers profitably, over handicapping sector consolidation efforts. Those milestones may yet take precedence over M&A speculation for investors, were speculation to fall flat once more.

For more on the wireless industry, see why AT&T is still hungry for more spectrum and how a tower deal twists industry consolidation.

-- Written by Antoine Gara in New York