Should MetroPCS Buy Back Shares?

Markets are near efficient, nevertheless in some instances a brand image can overly influence investors' opinion of a stock. Because MetroPCS has been cast by many cell phone users as an inferior network, many investors automatically assume the stock itself is as well of inferior quality. At this time, neither of those assumptions is correct.

Several years back, MetroPCS did have a fairly low quality network with snail speed Internet. Calls would occasionally drop. Callers would frequently not hear each other properly, especially deep inside of large buildings. However even at that time, the network got the job done and for the correct price, all the during making the company profit. Since next, call quality on the network has risen dramatically and Internet speed is sufficient for even every day users. Dropped calls are to put it more exactly rare, and voice quality on the newest 4G LTE (Long Term Evolution, latest standard in the mobile network technology) phones is near indistinguishable from carriers like Verizon, AT&T, or Sprint.

In the future, a network upgrade to VOLTE/VoIP (Voice over Internet Protocol) will allow MetroPCS to offer even higher quality voice services to its users, possibly called HD Voice, and together allow a more efficient use of network resources and spectrum.

Massive war chest

With such a massive war chest and stable business, I believe MetroPCS ought to show the market which company as a matter of fact can afford to buy MetroPCS out. And that company is none other than MetroPCS itself.

The future is bright for MetroPCS because other options for that cash exist too. A dividend, a large network expansion, or a buyout of a smaller company could all be announced. But in the long run, a medium sized share buyback seems to reward investors sufficiently during continuing the company's high rate of growth.