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Quarter-End Insights

Communication Services: Think Small for Opportunities in This Shifting Sector

Industry gearing up for upcoming streaming wars.

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After setting a torrid pace through the first three quarters of 2019, the Morningstar US Communication Services Index took a breather to end the year (Exhibit 1). The index inched up less than 1% over the past three months, lagging a 6% gain for the broader market. Traditional phone companies AT&T and Verizon, along with cable giant Comcast, dominate the index and largely dictate its direction. AT&T shares have held steady recently following an eventful summer that saw renewed optimism on the involvement of activist hedge fund Elliott Management. At present, we don’t see significant opportunities among large-cap telecom firms.

In the old communications sector, performance has cooled. - source: Morningstar

Michael Hodel does not own (actual or beneficial) shares in any of the securities mentioned above. Find out about Morningstar’s editorial policies.

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