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John Mugarian is the editor of
the soon-to-be-launched Investor Alert
from Phillips Publishing, designed to help investors
avoid pitfalls when dealing with brokers and brokerage firms. We look forward to his
new letter and are thrilled to offer our readers a preview of his work.
"SBC Communications (SBC NYSE) is the
second largest telephone company in the US. SBC is the combination of Southwestern
Bell, Pacific Telesis, and Ameritech with 57 million phone lines in 13
states. In addition, SBC owns a 60% stake in Cingular Wireless. In 2001, the company
traded in the $50s and is currently trading around $25. Left for dead and
paying a 5% dividend, the company is back on the comeback trail.
"Recently, SBC announced plans to
buy back 10% of its outstanding shares and raise the dividend by 10.6%.
Share repurchases will reduce the number of outstanding shares, and raise
earnings. Mexico's richest man, Carlos Slim Helu purchased five million shares in October
2003 at prices around $22/ share. The last time I saw Carlos Slim buy this
aggressively, he was buying Phillip Morris at $19/ share. Mr. Slim is an SBC
Director and has proven to be a very savvy investor. I am looking for a
conservative 25% gain in SBC, and maybe more."
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