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Top Telecom Stocks: Insights on the Valuations

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Forward PE ratio

On May 14, AT&T (T) was trading at a 12-month forward PE ratio of 8.63x, while T-Mobile’s (TMUS) 12-month forward PE ratio was 17.39x. A company’s PE ratio shows the amount investors are willing to pay per dollar of the EPS.

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Moving averages

On May 14, AT&T stock closed the trading day at $31.09. Based on this figure, the stock was trading 0.3% above its 20-day moving average of $31.01, 0.1% above its 50-day moving average of $31.08, and 1.7% above its 100-day moving average of $30.58.

T-Mobile was trading 4.7% above its 100-day moving average, while Sprint (S) was trading 0.7% below its 100-day moving average.

Relative strength index

The RSI (relative strength index) is measured on a scale of zero to 100. A score below 30 suggests that a stock is oversold, while a score over 70 suggests that a stock is overbought. On May 14, AT&T’s 14-day RSI score was 52. T-Mobile and Sprint’s 14-day RSI scores were 52 and 55, respectively.

MACD

On May 14, AT&T’s 14-day MACD (moving average convergence divergence) was 0.09. T-Mobile’s 14-day MACD was 0.39, while Sprint’s 14-day MACD was 0.32. A stock’s MACD marks the difference between its short-term and long-term moving averages. A positive MACD reading suggests that a stock is in an upward trading trend, while a negative MACD reading suggests a downward trading trend.

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