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The Zacks Analyst Blog Highlights: AT&T, Research in Motion, Telefonica Brasil, TELUS and SLM

Zacks Equity Research


For Immediate Release

Chicago, IL – June 17, 2013 – Zacks.com announces the list of stocks featured in the Analyst Blog. Every day the Zacks Equity Research analysts discuss the latest news and events impacting stocks and the financial markets. Stocks recently featured in the blog include AT&T, Inc. (T-Free Report), Research in Motion (BBRY-Free Report), Telefonica Brasil, S.A. (VIV-Free Report), TELUS Corporation (TU-Free Report) and SLM Corporation (SLM-Free Report).

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Here are highlights from Friday’s Analyst Blog:

AT&T to Bring Galaxy S4 to Market

Catching up with the latest smartphone trend, AT&T, Inc. (T-Free Report) will be launching the latest Samsung premium smartphone – Galaxy S4 – in Jun 21. The handset will be available for $199.99 on a two-year contract. We believe the latest addition of premium handsets will drive customer additions and upgrades leading to revenue accretion for the company.  

This year, AT&T rolled out Research in Motion’s (BBRY-Free Report) BlackBerry Z10 with the aim of adding customers. The company in its latest update on its second quarter performance indicated a surge in its wireless business, in particular the post-paid segment, following promotional strategies that it had undertaken. These initiatives resulted in increased smartphone upgrades along with sales.  AT&T is now primarily focused on adding devices that mostly support 4G LTE to its equipment portfolio. This is because the company has accelerated its 4G Long-Term Evolution (:LTE) and remains ahead of schedule.

The company boasts the best Internet speeds in the industry as it is the only U.S. carrier that provides 4G networks through both Long Term Evolution (:LTE)and High-Speed Packet Access Plus (HSPA+) technologies. AT&T’s LTE networks serve asthe benchmark of mobile technology and the life-blood for operators across the world.  The LTE expansion of the company is also supported through Project Velocity. Under this project, AT&T will invest $14 billion in the coming three years to considerably expand the wireless (investment of $8 billion) and wireline (investment of $6 billion) Internet Protocol (IP) broadband networks.

The company targets to extend the wireline IP network to nearly 57 million customer locations (including both customers and small businesses) – covering 75% of AT&T’s wireline service area – by the end of 2015. This project underlines the company’s efforts to meet the growing demand for high-speed Internet. We believe that this investment program will provide AT&T with a high-potential growth platform, leading to higher revenues and improved earnings per share over the near term.

AT&T, currently has Zacks Rank #3 (Hold).

Other Stocks

Telefonica Brasil, S.A. (VIV-Free Report) and TELUS Corporation (TU-Free Report) with Zacks Rank #2 (Buy) are two stocks we find worth considering in the telecom sector.

Sallie Mae Sheds Student Loan Stake

 

Leading U.S. student lender SLM Corporation (SLM-Free Report), also known as Sallie Mae, recently declared the formation of a new loan trust named SLM Student Loan EDC Repackaging Trust 2013-M1. Sallie Mae sold BBB-rated bonds at face value of $225 million with a weighted average life of 3.05-year and a 3.5% interest rate, through this trust. The student lender also did away with its entire residual interest of the trust.

The SLM Student Loan EDC Repackaging Trust 2013-M1 is collateralized by the remaining interests from SLM Student Loan Trusts 2006-8, 2006-9 and 2007-1. However, the company declared that it will continue servicing the loans in these trusts as per existing agreements.

The sale will result in the elimination of student loans worth $6.6 billion and associated liabilities worth $6.4 billion from Sallie Mae’s balance sheet. Further, the gains from the deal will result in approximately 23 cents per share added to Sallie Mae’s second-quarter 2013 GAAP as well as core earnings.

In Mar 2012, both the U.S. House and the Senate passed a bill to overhaul the student loan program, ending the Federal Family Education Loan Program (:FFELP) that provided federal subsidies to private lenders.

The bill required the origination of federally guaranteed student loans under the Direct Loan Program run by the U.S. Department of Education while eliminating the role of private lenders altogether. Hence, in compliance with the above legislation, Sallie Mae stopped originating new federally guaranteed student loans after Jun 30, 2012.

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