Is T-Mobile a Good Portfolio Play?

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With shares of T-Mobile (NASDAQ:TMUS) trading around $33, is TMUS an OUTPERFORM, WAIT AND SEE, or STAY AWAY? Let’s analyze the stock with the relevant sections of our CHEAT SHEET investing framework:

T = Trends for a Stock’s Movement

T-Mobile offers mobile communications services under the T-Mobile brands in the United States, Puerto Rico, and the U.S. Virgin Islands. Its service offerings include postpaid and prepaid wireless voice, messaging and data services, mobile broadband, and wholesale wireless services.

T-Mobile agreed to buy airwaves from Verizon Wireless (NYSE:VZ) for about $2.4 billion in cash as part of a spectrum swap that will give both companies more network capacity in areas where they need it. T-Mobile, the fourth-largest U.S. wireless carrier, will purchase 700-megahertz A-block spectrum licenses from Verizon, according to a statement yesterday. As part of the exchange, Verizon, the largest U.S. wireless carrier, will get so-called AWS and PCS licenses, which have a combined value of about $950 million. The deal will provide T-Mobile with a big swath of low-band frequencies — a type of spectrum that Chief Operating Officer Jim Alling has said are the missing piece of its network coverage. Verizon, meanwhile, can use T-Mobile’s so-called AWS airwaves to relieve congestion in cities where network performance has suffered due to heavy traffic.

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