Earlier today, we sent out our weekly issue of Tematica Investing. (The original post is below).

We always love hearing from our subscribers when they tell us how much they enjoy Tematica Investing not only for its insightful investing thoughts and recommendations but because we try to keep it fun as well.

Believe it or not, we also like it when a subscriber drops us a line to point out something we missed — sometimes it’s a more than useful data point and sometimes it’s pointing out that a position was stopped out.

The latter happened today thanks to one of our loyal subscribers reminded us that AT&T (T) shares crossed through our $39 stop loss on Monday, which closed out the position with an 18 percent return. 

The bittersweet issue, however, is we were stopped out on the very day when owning the shares at the end of the day qualified us for the next $0.48 per share dividend payment on November 1.

If you didn’t set the price limit — well, then I guess it’s one of those cases like back in elementary school when you didn’t do your homework, but end up having a substitute teacher anyway. You live to see another day.

Here’s the thing…

Over the last several weeks, AT&T shares have drifted lower falling more than 10 percent in the process. We continue to like the company’s sticky and inelastic mobile business as well as its enviable dividend yield that currently sits just under 5 percent as it continues to invest in its soon to be released DirectTV Now video streaming service. In our view, that service puts AT&T in a much firmer competitive stance to battle Comcast (CMCSA) and Verizon (VZ).

Moreover, on the back of several negative earnings pre-announcements from Honeywell (HON), Dover Corp. (DOV), Illumina (ILMN) and Fortinet (FTNT) and Alcoa’s (AA) revenue shortfall and revised lower outlook, we are using the current weakness in AT&T shares to scale back into what we see as safer harbor as earnings season kicks into gear.

Our price target on the shares remains $44. We are holding off issuing a protective stop loss as we will use market volatility this earnings season to improve our cost basis should the opportunity arise.

I apologize for the confusion on this, and more importantly for the implications on returns.  But my stance is, and will always be, that we own up to our mistakes and set the record straight.

Thank you for your business, and let us know if you have any questions.

Chris Versace
Chief Investment Officer
Tematica Research, LLC