The Mother of All Blue Chips
08/12/2016 7:00 am EST
In his specialized data-driven trading service, Alpha Algorithm, editor Nicholas Vardy assesses stocks based on 20 time-tested investment strategies. Here, he looks at "Ma Bell".
Our latest screen revisits a previous blue-chip recommendation, AT&T (T). Last time, we booked an 11.26% gain after it hit its stop price on a market pullback.
And it has only gotten more popular among the Alpha strategies since then. Here are the eight top investment strategies that are betting on AT&T:
1. High Quality Stock
The stock exhibits positive fundamentals, including high return on equity, stable year-over-year earnings growth and low financial leverage.
2. Momentum Factor
The stock also is one of the top 120 large- and mid-cap US stocks exhibiting relatively higher price momentum, as measured by a specific factor which has historically driven a significant part of companiesâ€™ risk and return.
3. Fundamental Strength
It is a top US stock based on fundamentals measured by book value, cash flow and sales dividends.
4. Dividend Aristocrat
The stock is among those in the S&P 500 that have increased dividends for at least 25 consecutive years.
5. Dividend Dog
It is one of the five highest-yielding stocks among each of the 10 sectors tracked in the S&P 500.
6. High and Steady Dividend
The stock is one of 50 dividend-paying companies from the S&P 1,500 Composite Index that has increased dividends for at least 20 consecutive years.
7. Small-Cap/Value Tilt
Selected using a multi-factor modeling approach, the stock is a smaller-cap or value stock designed to enhance portfolio risk/return characteristics.
8. Large-Cap Growth and Value
Using a proprietary ranking based on separate models for growth and value, this is a large-cap stock that is part of an index that has historically outperformed its market-cap weighted benchmark.
Our recommendation is to buy AT&T at market and place an initial stop at $34.