Government to Block AT&T and T-Mobile Merger

Zacks highlights commentary from People and Picks Member «DiviMO».

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The telecom sector is down today due to the announcement that the government is going to sue to block the AT&T and T-Mobile merger. AT&T ([url=http://www.zacks.com/stock/quote/t]T[/url]) is down at the moment to it's previous support level.

I see this as an opportunity for me to buy AT&T at a very favorable price for a long hold to lock in a dividend yield of over 6% on a solid company leader. AT&T is currently priced this morning in the 28 to 28.15 range. It could drop even more during the day. If interested, one can purchase (as I am) an incremental amount right now and see where it goes later in the day for additional purchasing.

Another play, with AT&T down today is to get the upped premium on AT&T puts. One can write a put and collect the premium betting that AT&T would not drop to the strike price. For example, the premium on AT&T 27 OCT's is .82

Post Update: Noon. I also wrote a put on AT&T OCT 26...getting $55.00 premium pocket change. IfI get assigned AT&T at 26 my dividend yield will be a whopping 6.75% as my cost basis would be 25.45 (excluding commissions).

The most recent picks by «DiviMO» are:
A sell rating on Cree, Inc. ([url=http://www.zacks.com/stock/quote/cree]CREE[/url]),
a sell rating on Nexen, Inc. ([url=http://www.zacks.com/stock/quote/nxy]NXY[/url]) and
a buy rating on Baidu.com ([url=http://www.zacks.com/stock/quote/bidu]BIDU[/url]).

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