Ray Dalio’s Bridgewater Associates is the largest hedge fund in the world, with over $123 billion in assets under management. Recently, the fund revealed to the United States Securities and Exchange Commission (SEC) which companies it bought and which it sold.
AT&T (NYSE: T)
AT&T (NYSE: T) is a holding company that provides telecommunication and technology services worldwide via its subsidiaries.
Bridgewater Associates bought 1.98 million shares of AT&T at an average price of $15.9. The total investment is worth around $31 million, and it puts it among the smaller holdings at 0.2% of the fund’s portfolio.
Investing in AT&T comes with one of its perks: a massive dividend at 7.87% annually, which makes it a great addition to anyone who wants passive income on their portfolio.
AT&T recently reported its Q2 earnings, where it beat estimates for free cash flow. The company said it had achieved its $6 billion cost-cutting goal ahead of schedule and was now targeting another $2 billion-plus over the next 3 years.
To support the high dividend and service its debt, the company needs free cash flow and cost-cutting measures. However, AT&T is expected to produce $17 billion in free cash flow each year for the next three years, according to Wall Street estimates, which should put the company in a good position to keep the high dividend yield in the coming years.
Morningstar’s analyst equity report has put a fair value estimate on AT&T’s stock at $23. That’s a 63% difference from the current market price of $14.10.
AT&T stock technical analysis
AT&T currently trades near a strong support level of $14, which successfully held the price back in 2022. The stock looks heavily oversold at the moment, meaning we could see a bounce to $15 in the short term.
If the price breaks $15 and manages to hold there, we could see a slow grind back to $18 at some point in the coming months.
Regardless of what the future holds, AT&T has underperformed the S&P 500’s 15% return this year with a negative 24%.
Disclaimer: The content on this site should not be considered investment advice. Investing is speculative. When investing, your capital is at risk.