SI Posted July 6, 2017 Share Posted July 6, 2017 Packer, Cowen published his proforma model today. He is not buy rated on CTL/L3 and is using $2.16 in 2018 FCF/share and $3.40 in 2019 as tax and synergies start helping in 2019 and $3.73 in '20 and '21 $3.83 on 90bps, 130 and 150bps of rev growth and 37%, 38%, 39% and 41%(where he has margins leveling out) so as you can see this is all about the margins. I have the under actually on those revenues but the over on margins. Link to comment Share on other sites More sharing options...
Valuehalla Posted July 8, 2017 Share Posted July 8, 2017 http://www.fiercetelecom.com/telecom/sprint-ordered-to-pay-12-5m-to-centurylink-for-underpaying-voip-call-termination Link to comment Share on other sites More sharing options...
Valuehalla Posted July 11, 2017 Share Posted July 11, 2017 http://www.cnbc.com/2017/07/11/singapores-temasek-portfolio-rose-to-198-point-6-billion--up-13-percent-for-fiscal-year.html Temasek is holding 65 Mio shares of LVLT (= 18% of LVLT), = app. 3,8 B US$, so 2 % of the Temasek portfolio. Anticipated no changes, they will hold 8,8 % of the combined entity (CTL+LVLT) in the future. Link to comment Share on other sites More sharing options...
JayGatsby Posted July 12, 2017 Share Posted July 12, 2017 https://www.bloomberg.com/news/articles/2017-07-12/centurylink-sued-by-minnesota-over-billing-practices Every company has billing issues, the difference is how they're addressed. I think any analysis of Centurylink without ascribing some level of increased legal/compliance costs or decreased pricing power is risky. That was the lesson learned from Ocwen for me.. their underlying business continued as expected (actually better in some ways), but they couldn't escape a historically loose culture and state AGs destroyed the valuation with compliance/legal costs. Politics gets involved as well. I suppose the opposite argument could be made for Altria... those that invested at the peak of their legal issues have done quite well. Link to comment Share on other sites More sharing options...
Valuehalla Posted July 18, 2017 Share Posted July 18, 2017 https://seekingalpha.com/article/4088386-centurylink-king-yield Link to comment Share on other sites More sharing options...
Valuehalla Posted August 2, 2017 Share Posted August 2, 2017 Q2 figures are out: LVLT: good results; slightly increased revenue, margin increased, EBITDA increased, deleverage was going forward: target leverage ratio of 3 is reached ! Outlook 2017 for EBITDA and FCF reconfirmed CTL: results concerning the revenue 4,09 B are slightly over the low end of published expectations of 4,07B, Due to the fact that in 2Q17 100M revenue was lost because of the Data-Center Sale realized from 1th May on, the revenue decline is nearly stopped, if we compare revenue in 2Q17 (4,09B+0,1= 4,19B) with revenue in 1Q17 (4,21B) No updated outlook for full year any more, cause of acquisition of LVLT; although management gave the statement, that figures will come in on low end of expectations. They renamed some figures: FCF is renamed in adjusted FCF, Operative Cashflow renamed Adjusted EBITDA Adjusted EBITDA with 1,442B slightly better than expected, but lower than 2Q16 1,637B Adjusted EBITDA margin 35,3% also slightly better than expected, but lower than 2Q16 37,22% Adjusted FCF was negative (52M) in 2Q17 mainly related to income tax (255M more than 2Q16) and capital expenditures (181M more than 1Q16) and others (15M more cause Data Center Sale). In 2Q16 FCF was 617 M. My expectation was 392 M FCF. If i adjust the deltas of tax and capex its app inline. Management expects improvement: "The company also expects a significant increase in third quarter 2017 adjusted free cash flow compared to second quarter 2017 results due to the timing of cash interest and cash tax payments, along with an anticipated decline in the level of capital expenditures in the third quarter of 2017 compared to second quarter 2017." LVLT acquisition on track, expected to be finished till end of September In afterhours trading CTL and LVLT were most time slightly higher priced than closing price of 23,74 US$ The lawsuites were not a big subject during the conference calls. They started to simplify the complex price system already in Feb 2017 and they said there is/was no fraud. They try to make offers / bills more understandable and simpler for customers and employees. Link to comment Share on other sites More sharing options...
Valuehalla Posted August 3, 2017 Share Posted August 3, 2017 CTL / LVLT 2Q17 figures: 2 important goals are achieved: 1) The management of CTL nearly stopped the shrinking of the revenue: Compared to 1Q17 in 2Q17 the revenue did nearly not decline anymore. From 1th May on, 100 M revenue was lost due to the accounting, cause of the sale of the Data Centers to a new formed entity, in which CTL has shares as well, but did not account this revenue in its own balance anymore. The revenue in 2Q17 was 4,09B + 0,1B adjusted = 4,19B. The revenue in 1Q17 was 4,209B. New products are already offered from 1th June on, so to my expectations there is a high probability, that from 3Q17 on, revenue will slightly increase, in comparison to 2Q17. Number of subscribers declined just very slightly, app 1 %, from 1Q17 to 2Q17. 2) The management of LVLT reached the longtime promised leverage-ratio of x 3.0 to EBITDA. Further LVLT had on 30th June 1.05B Cash and 1,127B Marketable securities on hand. Summary: I as an investor, have no doubt, that the dividend of 2,16 US$ ( 9 % !) per share can be paid in the near and midterm future. The new management team will do exactly the same, what they have successfully done in the last years with LVLT: Increase revenue & cashflow and deleverage the company. Link to comment Share on other sites More sharing options...
Valuehalla Posted August 3, 2017 Share Posted August 3, 2017 Just increased my CTL position by 11 % I paid 22,55 US$ per share = 9,57 % dividend rate. GREAT DEAL, thx Mr Market Link to comment Share on other sites More sharing options...
saltybit Posted August 3, 2017 Share Posted August 3, 2017 http://www.barrons.com/articles/centurylink-shares-gets-hit-again-as-q2-results-fail-to-impress-1501772992?mod=hp_RTA& Link to comment Share on other sites More sharing options...
Valuehalla Posted August 3, 2017 Share Posted August 3, 2017 First time there is a CTL presentation available. The style is like the LVLT style. Level 3 habits already entering CTL.... ;D https://www.snl.com/Cache/1500102077.PDF?O=PDF&T=&Y=&D=&FID=1500102077&iid=4057179 Link to comment Share on other sites More sharing options...
LightWhale Posted August 9, 2017 Share Posted August 9, 2017 Mason Hawkins (CEO Southeastern Asset Management) activity in Q1 2017 concerning LVLT: Longleaf Partners Fund 5.958.138 = +/- 0 % (end of Q4= 5.958.138) Southeastern Asset Management Inc 27.779.930 = - 0,9 % (end of Q4= 27.955.852) Longleaf Partners Smallcap Funds 5.717.590 = +/- 0 % (end of Q4= 5.717.590) The mentioned "vehicles" accumulate app. 11 % of LVLT at the end of Q1 2017 So Longleaf Partner Fund is still in LVLT, no swap to CTL until 31.3.2017, no CTL shares mentioned Lonfleaf would have had to pay capital gains in order to swap, so that's obviously a no-go for them. http://www.cnbc.com/2017/07/11/singapores-temasek-portfolio-rose-to-198-point-6-billion--up-13-percent-for-fiscal-year.html Temasek is holding 65 Mio shares of LVLT (= 18% of LVLT), = app. 3,8 B US$, so 2 % of the Temasek portfolio. 45% of the deal is in cash, so post-merger the combined entity will comprise only 1% of Temasek's portfolio. Same logic goes for Longleaf, where the combined will be ~6% of the Partners Fund. it will be rated B after the transaction (the debt is trading 6.7% which also implies a B rating with B trading at 5.7%) implying a 35% default in 10 years based upon historical defaults. The market evidently agrees with the default stats you mention. Perhaps the move from the general stats to company specific is qualitative - the only reason to invest in the merger would be a belief in LVLT's management. It's basically a jockey stock. Since Crowe stepped down, Storey and Sunit have been impressively focused on cost cutting, improved margins and debt reduction (aided by the lowest interest rates ever). If leverage is the main threat to the combined entity, no one fits the job better. It would be fair to assume that default chances are closer to 0% than 35%. So IV should be closer to 32-35, rather than 22. If LVLT's global network can improve Centurylink's offer to existing domestic clients and stem the churn, IV goes up to the high-end 30's. So only if no credit whatsoever should be given to management, current price is fairly valued. Link to comment Share on other sites More sharing options...
Guest longinvestor Posted August 9, 2017 Share Posted August 9, 2017 Mason Hawkins (CEO Southeastern Asset Management) activity in Q1 2017 concerning LVLT: Longleaf Partners Fund 5.958.138 = +/- 0 % (end of Q4= 5.958.138) Southeastern Asset Management Inc 27.779.930 = - 0,9 % (end of Q4= 27.955.852) Longleaf Partners Smallcap Funds 5.717.590 = +/- 0 % (end of Q4= 5.717.590) The mentioned "vehicles" accumulate app. 11 % of LVLT at the end of Q1 2017 So Longleaf Partner Fund is still in LVLT, no swap to CTL until 31.3.2017, no CTL shares mentioned Lonfleaf would have had to pay capital gains in order to swap, so that's obviously a no-go for them. http://www.cnbc.com/2017/07/11/singapores-temasek-portfolio-rose-to-198-point-6-billion--up-13-percent-for-fiscal-year.html Temasek is holding 65 Mio shares of LVLT (= 18% of LVLT), = app. 3,8 B US$, so 2 % of the Temasek portfolio. 45% of the deal is in cash, so post-merger the combined entity will comprise only 1% of Temasek's portfolio. Same logic goes for Longleaf, where the combined will be ~6% of the Partners Fund. it will be rated B after the transaction (the debt is trading 6.7% which also implies a B rating with B trading at 5.7%) implying a 35% default in 10 years based upon historical defaults. The market evidently agrees with the default stats you mention. Perhaps the move from the general stats to company specific is qualitative - the only reason to invest in the merger would be a belief in LVLT's management. It's basically a jockey stock. Since Crowe stepped down, Storey and Sunit have been impressively focused on cost cutting, improved margins and debt reduction (aided by the lowest interest rates ever). If leverage is the main threat to the combined entity, no one fits the job better. It would be fair to assume that default chances are closer to 0% than 35%. So IV should be closer to 32-35, rather than 22. If LVLT's global network can improve Centurylink's offer to existing domestic clients and stem the churn, IV goes up to the high-end 30's. So only if no credit whatsoever should be given to management, current price is fairly valued. Nice summary. Yes, it's a jockey stock alright! That's not new. Hope Jeff/Sunit are up to the task. It's big and hairy. As if LVLT wasn't enough. Link to comment Share on other sites More sharing options...
Valuehalla Posted August 9, 2017 Share Posted August 9, 2017 Thanks for the comments, we have great Jockeys at CTL now and in future... Link to comment Share on other sites More sharing options...
Valuehalla Posted August 11, 2017 Share Posted August 11, 2017 http://www.nasdaq.com/article/centurylink-ctl-to-offer-consumers-flexible-ott-tv-service-cm830641 Link to comment Share on other sites More sharing options...
txvalue Posted August 15, 2017 Share Posted August 15, 2017 Hitting 52 week lows today VH must be happy 8) Link to comment Share on other sites More sharing options...
Valuehalla Posted August 17, 2017 Share Posted August 17, 2017 Just added again a smaller position CTL for 20,26 US$; my avg buying price is 22,58 US$ per CTL for now. Be fearful when others are greedy and be greedy when others are fearful! Next milestones to wait for are: - dividend confirmation for Q3 around 23. August, payable on app. 15th Sept. for holders on app. 2.Sept - receiving permission and finalizing the LVLT acquisition till 30th September 17 - figures of Q3 beginning of November 17 Link to comment Share on other sites More sharing options...
Valuehalla Posted August 17, 2017 Share Posted August 17, 2017 There are rumours the aquisition of LVLT could be delayed by California PUC: http://www.tellusventure.com/blog/no-express-lane-offered-for-centurylink-level-3-review-at-cpuc/ http://www.tellusventure.com/blog/no-halloween-treat-for-centurylink-level-3-deal-in-california/?utm_campaign=twitter&utm_medium=twitter&utm_source=twitter https://ctfn.news/aug-16-2017-ctl-lvlt-12364/ http://www.barrons.com/articles/the-biggest-loser-centurylink-sinks-7-2-1503004764?mod=yahoobarrons&ru=yahoo&yptr=yahoo Link to comment Share on other sites More sharing options...
Valuehalla Posted August 17, 2017 Share Posted August 17, 2017 Today Corvex (Keith Meister) increased its holdings of CTL by 5,5 Mio shares: On 8thMay 2017: 29.998.645 shares = 5,5 % http://ir.centurylink.com/Cache/2000479974.pdf?IID=4057179&FID=2000479974&O=3&OSID=9 On 16th June 2017 30.998.645 shares = 5,6 % http://ir.centurylink.com/Cache/389128285.pdf?IID=4057179&FID=389128285&O=3&OSID=9 On 17th August 2017 36.548.645 shares =6,6 % http://ir.centurylink.com/Cache/389963767.pdf Further Corvex holds call options for 17 M shares: https://seekingalpha.com/news/3290416-centurylink-plus-1_9-percent-corvex-boosts-stake-6_6-percent-reports-call-options Link to comment Share on other sites More sharing options...
Valuehalla Posted August 19, 2017 Share Posted August 19, 2017 California PUC: http://docs.cpuc.ca.gov/PublishedDocs/Efile/G000/M193/K982/193982683.PDF There is a schedule on page 5, CTL applied for a decision on 14th September PUC meeting (page4). According to the schedule a proposed decision shall be made latest till 15th October, the finial decision shall be made latest till 15th November. Both steps could be done more early. So there is no evidence for a delay until now. However there is some kind of possibility the process could be extended by C PUK, it seems to me more likely, that they will finish in time. Take also notice of this comment: http://www.tellusventure.com/blog/no-halloween-treat-for-centurylink-level-3-deal-in-california/?utm_campaign=twitter&utm_medium=twitter&utm_source=twitter CTL and LVLT set a timeline till 30th Sept. (planed) to 30th October (latest) to finish the acquisition. A1703016 is the number of the case in the the California PUK: the process and all documents could be seen here: http://www.cpuc.ca.gov/ There is another master-schedule (for all lasting PUK cases) available, that shows the PUK will negotiate the A1703016 case on 24th August as a PHC (Prehearing). That seems to me an indication for an earlier approach. It could mean there will be a proposed decision on 24th August and the final decision till latest 24th September, probably on 14th September Link to comment Share on other sites More sharing options...
Valuehalla Posted August 19, 2017 Share Posted August 19, 2017 https://www.fcc.gov/transaction/centurylink-level3 Link to comment Share on other sites More sharing options...
Valuehalla Posted August 21, 2017 Share Posted August 21, 2017 CTL is using AI http://www.lightreading.com/automation/centurylink-using-ai-to-boost-sales-efficiency/d/d-id/735575 Link to comment Share on other sites More sharing options...
Valuehalla Posted August 22, 2017 Share Posted August 22, 2017 2016: https://www.verticalsystems.com/vsglb/mid-year-2016-u-s-carrier-ethernet-leaderboard/ 2017 (published today): https://www.verticalsystems.com/vsglb/mid-year-2017-u-s-carrier-ethernet-leaderboard/ Comment: https://finance.yahoo.com/news/verizon-apos-ethernet-growth-backed-120112028.html?.tsrc=applewf IMO: Further indication CTL + LVLT will have growing revenues soon. Link to comment Share on other sites More sharing options...
Valuehalla Posted August 22, 2017 Share Posted August 22, 2017 Dividend is declared, as expected: for the quarter 0,54 US$ per share = 2,16 US$ a year = 10,85 % of todays closing price 19,90 US$ https://finance.yahoo.com/news/centurylink-declares-quarterly-cash-dividend-202100578.html?.tsrc=applewf "CenturyLink's management and board of directors see our quarterly cash dividend as an important part of our value proposition for shareholders," said Glen F. Post III, CenturyLink chief executive officer and president. "Upon completion of the Level 3 acquisition, we anticipate generating nearly a billion dollars in cash synergies, as well as significant cash tax savings from the accelerated recognition of Level 3's net operating losses. These cash savings, along with our focus on profitable growth, are expected to drive increasing free cash flow per share, enhance our financial flexibility and improve our dividend payout ratio." Link to comment Share on other sites More sharing options...
Valuehalla Posted August 24, 2017 Share Posted August 24, 2017 http://ir.centurylink.com/file/Index?KeyFile=390027984 Link to comment Share on other sites More sharing options...
Valuehalla Posted August 28, 2017 Share Posted August 28, 2017 Mason Hawkins (CEO Southeastern Asset Management) activity in Q2 2017 concerning LVLT: Shares hold on 30.06.2017 Longleaf Partners Fund 5.958.138 = +/- 0 % (end of Q1= 5.958.138) Southeastern Asset Management Inc 27.194.043 = - 2,1 % (end of Q1= 27.779.930) Longleaf Partners Smallcap Funds 5.717.590 = +/- 0 % (end of Q1= 5.717.590) The mentioned "vehicles" accumulate app. ? % of LVLT at the end of Q2 2017 They announced for the Partner Funds & Smallcap Funds, where LVLT is each the largest position, LVLT will become a normal weight position in the future, cause app 45 % of the deal will be paid in cash. Sounds as if they will not reinvest this money in the new formed company. http://longleafpartners.com/sites/default/files/categories/Documents/2Q17-Longleaf-Partners-Small-Cap-Commentary.pdf Link to comment Share on other sites More sharing options...
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