During a stock market correction, while we’re waiting on the sidelines, there is still plenty to do. One of the winning strategies is to identify shares that have held up well in spite of the general selling pressure. One such company, which is also a potential turnaround story, is Sprint Nextel Corp.
They have been unloved by investors, mostly due to persistent subscriber losses and a fairly high debt load. However, their Q1 2010 earnings call gave some indication that they are turning the corner, and with the rollout of 4G services and their competitive pricing, interest in the stock has picked up. Here’s a chart that show the activity (click on chart to open):
Note the higher volume on up days, and the spiking money flow – although relative strength is not as impressive. Is it a screaming buy at this point? Maybe not; it looks speculative here, and the poor action in the broader market is a definite negative. For me, it does merit being put on the watch list for a possible long position when things stabilize.