Friday, 22 June 2012

Investor's Checklist: Telecom

Shifting regulations and new technologies have made the telecom industry far more competitive.  Though some areas are more stable than others, look for a wide margin of safety to any estimate of value before investing.

Telecom is a capital-intensive business.  Having the resources to maintain and improve the network is critical to success.

Telecom is high fixed-cost business.  Keeping an eye on margins is very important.

Watching debt is also important.  Firms can easily overextend themselves as they build networks.

The price of wireless airtime is plummeting.  Carriers continue to compete primarily on price.

Ref:  The Five Rules for Successful Stock Investing by Pat Dorsey

Read also:
Investor's Checklist: A Guided Tour of the Market...

No comments: