With shares of Sprint Nextel Corp. (NYSE:S) trading at around $5.92, is S an OUTPERFORM, WAIT AND SEE or STAY AWAY? Let’s analyze the stock with the relevant sections of our CHEAT SHEET investing framework:
C = Catalyst for the Stock’s Movement
You have likely already heard that DISH Network (NASDAQ:DISH) offered $3.30 per share for Clearwire Corporation (NASDAQ:CLWR). Clearwire is reviewing the offer, but Sprint states that its earlier offer for Clearwire prohibits DISH from making a deal. Sprint is correct. Therefore, there will be no smooth and easy deal made between DISH and Clearwire. Sprint owns 50 percent of Clearwire and wants to that stake to go to 100 percent. Sprint offered $2.97 per share, and that deal looked like a reality until today. DISH isn’t a new player in all of this. DISH originally made the first offer, but Clearwire chose Sprint. For more information, turn to “The Young and the Restless.” Just kidding.
The truth of the matter is that it will take months, if not longer, for all of this to get sorted out. Therefore, it’s best to look at Sprint’s situation without all the noise. Let’s start by taking a look at some important numbers.