Crest Financial Boosts Clearwire Corporation (CLWR) Stake To Block Sprint Nextel (S)

These two companies have garnered much more respect from investors than third ranked Sprint. Although AT&T has a more robust dividend yield of 5.3% compared to Verizon’s 4.6%, we believe that the latter is a much better ‘growth at a reasonable price’ investment. Both companies do trade in line on a profit margin and P/E basis, but Verizon trades at only 1.1x sales versus AT&T’s 1.6x.

Another wireless provider competing for market share is MetroPCS Communications Inc (NYSE:PCS). MetroPCS is the pre-paid no contract mobile provider that has been able to gain positive traction in the market and is up 20% over the past twelve months. Billionaire John Paulson was a top new investor in MetroPCS last quarter (check out John Paulson’s newest picks).

Sprint, meanwhile, saw revenues up 3.4% last year, and is expected to produce a sales increase of 4.3% by the end of this year. Sprint should continue to grow revenue modestly over the next couple years as it facilitates the build out of LTE and 4G networks. We believe that Sprint is one of the cheapest stocks in the industry and should be positioned nicely assuming a Clearwire acquisition does go through.

Currently, Sprint trades at only 0.5x sales, where Verizon and AT&T are above 1x, and MetroPCS is at 0.7x. We see the see the acquisition of Clearwire as having more momentum than Crest can stop at this point. Billionaire Leon Cooperman is alongside David Einhorn as another top investor in Sprint (see Leon Copperman’s cheap picks). For other plays one can make in this arena, continue reading below:

Assessing Sprint Nextel’s Earnings

Here’s How We Could See an End to High Wireless Bills

Sprint: Fundamental Analysis