Sprint (S) shares, closing at $5.15 on June 27, have done well since I first wrote about the company’s turnaround potential last May (closing May 12, 2010 at $4.15), and in November when Sprint’s shares fell back to the $4 range during its now resolved spat with Clearwire (CLWR) (closing $4.03 on November 12). But this month they pulled back significantly from a 52-week high of $6.45 on June 2. So is the current lull a buying opportunity or a signal to get out? My view: This is a good chance to jump in or add to positions.
The Challenge: Rebuilding the Post-Paid Subscriber Base
Sprint has not turned an annual profit since 2006. In the first quarter of 2011 the company lost 15 cents a share, and a $439 million deficit, yet it was the best performance since Q2 of 2009.
The central challenge Sprint faces is rebuilding a subscriber base that has been ravaged.
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