A New Favorite Stock From Top Managers

Each quarter, we take a look at the recent transactions of some of the top money managers around today--who we call our Ultimate Stock-Pickers.

Last quarter, one stock in particular was a popular new-money buy among the group. What are new-money buys? Stocks that managers purchased that weren't in their portfolios the prior quarter.

T-Mobile topped the new-money purchase list with three funds buying into the firm despite not holding any positions in the company the prior quarter.

After its acquisition of Sprint in 2020, T-Mobile now matches the scale of its larger rivals AT&T and Verizon. With roughly 65 million postpaid and 21 million prepaid phone customers, T-Mobile provides service to nearly 30% of the retail wireless market. We think the company has recorded an impressive turnaround over the past several years. Despite initially lagging behind AT&T and Verizon and recording significant customer losses, T-Mobile was able to improve service, deploy new technologies, and provide better geographic coverage and capacity. These improvements resulted in significant customer growth for T-Mobile.

Despite the increased scale and improved cost position, Morningstar doesn't think T-Mobile has carved out an economic moat yet--though we do assign T-Mobile a positive moat trend. We think shares are worth $108 apiece.

Sector director Mike Hodel, associate analyst Malik Ahmed Khan, and analyst Eric Compton provided the research behind this segment.