Do These Signs Mean AT&T’s Stock is Over Valued?

that investors or traders are buying a decent amount of protection as compared to the last 30 and 90 trading days. The implied volatility skew of March and April put options is fairly steep while call option skew is relatively flat. Now, what does this mean? As of today, there is low demand from call buyers or high supply of call sellers while there is high demand by put buyers or low demand by put sellers, all neutral to bearish over the next two months. Thus, investors are buying a good amount of protection and are feeling neutral to bearish, over the next two months, about the stock.

E = Earnings Are Mediocre Quarter-Over-Quarter

A mature company like AT&T rarely puts up the earnings and revenue growth numbers that other companies do. So, earnings and revenue growth figures are not the primary driver of stock price. However, it is still important for a company to grow as much as possible at a pace it can achieve. The last eight quarterly yoy earnings growth numbers for AT&T have been: 3.28 percent, 10 percent, 5.26 percent, -70.53 percent, -10.45 percent, 39.02 percent, -54.55 percent, and 282.3 percent. The last eight quarterly yoy revenue growth figures for the company have been: 0.23 percent, -0.06 percent, 0.25 percent, 1.84 percent, 3.64 percent, -0.33 percent, 2.23 percent, and 2.35 percent.

More importantly, how did the market feel about these numbers? Taking a look at the last four quarterly earnings announcement reactions may offer…(see the conclusion on the next page)