Sprint/Nextel (S)

**JimBob2232** Tue Mar 28, 2006 6:32 pm

Sprint/Nextel (S)
Anyone else think this might be a good buy here

P/B 1.41
Forward P/E: 14.63
D/E 0.5
PEG 1.07

Seems to be undervalued from here. Opinions?

**coo** Tue Mar 28, 2006 6:54 pm

Bill Miller of Legg Mason has been buying. He talks it up in the latest OID.

**pass** Tue Mar 28, 2006 7:24 pm

Re: Sprint/Nextel (S)
why is it undervalued? PE seems higher than peers. also, wireless industry is a scale business, the more subscribers, the more efficient it operates, so as a smaller operator, Sprint may not be a good buy.

JimBob2232 wrote: Anyone else think this might be a good buy here

P/B 1.41
Forward P/E: 14.63
D/E 0.5
PEG 1.07

Seems to be undervalued from here. Opinions?

**coo** Tue Mar 28, 2006 8:25 pm

Re: Sprint/Nextel (S)
Sprint has the wireless biz, long distance and the local line biz. The spin off of the local line biz is scheduled to be complete May 2006. Miller estimates the wireless biz trades at about 5 times EV to EBITDA ($4.5B FCF in 2005) when you back out the long distance biz. He estimates FCF of $5.6B in 2006 and 6.7B in 2007.

Wireless itself has consolidated to 3 major players; Verizon, Sprint, and Cingular. Together they control over 3/4 of the market. Sprint has about 23% share I believe. Growth is in the 12-16% range.