That’s a sad commentary on how little Wall Street analysts and investors think about sustainability, despite many clear signs that green initiatives save money, resources, and the environment.
Hesse stated the desire to reach out to socially responsible investors and change the dialogue with Wall Street. Right now, socially responsible investors are the ones who would most keenly understand the ramifications of what Hesse is trying to do, even while some investors remain oblivious.
A risky environment indeed
The Prosocial Portfolio I’ve been managing for Fool.com seeks to take ESG (environmental, social, and governance) factors into consideration. Given Hesse’s interest in investors who cheer companies evolving into a greener future, I’d love to truly consider the stock for the portfolio.
Unfortunately, I can’t get past the fact that Sprint Nextel Corporation (NYSE:S) faces many challenges on an ongoing basis.
It’s not just the complexity of the dealings with SoftBank, DISH Network Corp. (NASDAQ:DISH), and Clearwire Corporation (NASDAQ:CLWR), although those are serious risks. For example, according to Sprint’s most recent Form 10-K, Sprint could face steep fees if it backs out of its deal with SoftBank. Should the SoftBank deal go through, “NewSprint” will still be a publicly traded company, but investors will own just 30% and Softbank will own the remaining 70%.
Sprint Nextel Corporation (NYSE:S) has faced a brutal competitive landscape over the years, and it shows. The company’s shareholder return over a five-year period has lagged the S&P 500. Although it’s grown its revenues again as of its most recent fiscal year, it’s been operating at annual losses for years. The company is also highly leveraged, and I try to avoid high levels of debt in the stocks I purchase, especially if the business faces challenges.
Hesse’s speech at the Ceres conference inspired me in many ways, and he’s clearly a forward-thinking, intelligent individual who can see where the future is going for wireless and for the planet and how companies can reenvision how to do business better. Sprint’s evolution into greener “pastures” is certainly smart thinking, and established companies that try to transform themselves get major brownie points in my investment book.
However, beyond social responsibility and positive business initiatives, I aim for positive returns for the Prosocial Portfolio, too. I wish I could believe that Sprint Nextel Corporation (NYSE:S)’s green initiatives mitigated current risks, but I don’t. Regardless, I hope more management teams will adopt Hesse’s vision and more investors will recognize that these initiatives benefit profits, people, and planet.
The article Sprint’s Secret Transformation Isn’t Enough to Buy originally appeared on Fool.com.
Alyce Lomax has no position in any stocks mentioned. The Motley Fool recommends and owns shares of Facebook Inc (NASDAQ:FB).
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