Guest longinvestor Posted May 10, 2018 Share Posted May 10, 2018 Congratulations to longs. CTL just appears to have overcome the cloud over the merger. That 15% divvy is looking nicer. CDN revenues went up 27% this Qtr. Appears to be driven by security services, similar to Akamai’s performance. Cyber security could be a nice opportunity here. Timing could not be better. Link to comment Share on other sites More sharing options...
Valuehalla Posted May 10, 2018 Share Posted May 10, 2018 Everything looks great to me. Like during the last years of LVLT Storey and Patel delivered what they have promised. And what they have promised yesterday in the conferencecall sounds excellent for the future. I am happy to be invested in CTL with a large part of my portfolio. My pricetarget remains at more than 31 US$ per share. Waiting to reach the pricetarget, i enjoy 12 % dividend. I have just also updated a little my remarks from yesterday, on the Q1 figures. Link to comment Share on other sites More sharing options...
JayGatsby Posted May 11, 2018 Share Posted May 11, 2018 Which management team will lead the company going forward? Has anyone long CTL actually done business with them? After a week of trying to get internet service from them for a small business we've decided to just use a Verizon hotspot. (Our unit was never individually wired, which I told them when I first called (otherwise I wouldn't have had to call in the first place). The sales guy spent a week trying to cross/upsell various things (like "long-distance"), before the installer out, took 2 minutes in the unit and said the unit was never wired and it was beyond what he could do). With mobile data becoming cheaper and faster I can't see this not becoming more common. The rates CTL charges for "business" internet are really high, while wireless companies don't make this distinction (businesses usually actually get significantly cheaper rates). Link to comment Share on other sites More sharing options...
Valuehalla Posted May 23, 2018 Share Posted May 23, 2018 Prem Watsa / Fairfax Financial increased its holding of CTL in Q1 by 29 %. It is now the 7th largest position in the portfolio of FFH with 2,3% of the portfolio. Link to comment Share on other sites More sharing options...
petec Posted June 19, 2018 Share Posted June 19, 2018 Valuehalla would you mind sharing how you get to $31? And do you know the $ value of the FFH position? Link to comment Share on other sites More sharing options...
Valuehalla Posted June 19, 2018 Share Posted June 19, 2018 Hello Petec, thx for adding questions 1) FFH was holding on 31th March 2018 1,847100 Mio CTL shares, today a 18 US$ = 33,24 Mio US$; that was an increase of 29,6% to the previous quarter. Source Dataroma. 2) CTL pricetarget of 31 US$ is my individual valuation. In case of 31 US$ the MarketCap would be 33,45 B; now 19,56B. According to the free cash flow (after capex & tax) of 3,2B per year, app. 10 times valuation seems reasonable to me. My individual estimation is based on many aspects. If the price woule be tomorrow higher than 31 US$ i would probably sell my position. As long as it is not, i keep my position and enjoy 12 % dividend paid on my account. The danger that the LVLT merger or the businessmodel (legacy revenues) will fail is off the table to my opinion. Next Q figures will show, that the new management is able to grow FCF and EBITDA, as they did in LVLT stand alone before. Link to comment Share on other sites More sharing options...
petec Posted June 19, 2018 Share Posted June 19, 2018 Thanks. My only issue with that is that the $3.2bn in FCF you use includes some tax payments and other things that look like one-offs to me. Unless we know they are recurring, I prefer a FCF figure of about $2.7bn. As for the multiple, 10x is very reasonable IF they can get FCF growing sustainably (which means the concerns about the capital structure go away). I agree that is looking more likely. So, 2.7*10=$27bn, $25...still a good upside. Link to comment Share on other sites More sharing options...
Valuehalla Posted July 10, 2018 Share Posted July 10, 2018 CTL closed today above 20 US$ per share. By that CTL delivered a great winning streck during the last 30 days, as it rised 12,5 % in that time, clearly outpreforming the S&P 500 (+0,37%). The Q2 figures will be published on 9th August after the bell. Revenue slightly above 6 B for Q2 would be a great sign, which would enable to top 24B for the full year 2018. This means, the shrinking of the revenue, caused mainly be the legacy customer revenue of CTL, would be overcome. FCF shall come in around 810 M for Q2. My target price remains 31 US$. Link to comment Share on other sites More sharing options...
petec Posted July 11, 2018 Share Posted July 11, 2018 By that CTL delivered a great winning streck during the last 30 days, as it rised 12,5 % in that time. I know - bloody annoying - I only bought half of what I wanted ;) Link to comment Share on other sites More sharing options...
Valuehalla Posted July 12, 2018 Share Posted July 12, 2018 Mason Hawkins on CTL from minute 21.10 on and from minute 33.18 on Link to comment Share on other sites More sharing options...
Valuehalla Posted August 8, 2018 Share Posted August 8, 2018 2Q 2018 Earnings are out: http://ir.centurylink.com/file/Index?KeyFile=394566856 - Positive surprise: Great Cash Flow figures! - Full year 2018 outlook raised EBITDA & FCF ! - MarketCap was 20,02 B on 18,56 $ closing price today, - After hour the share price is up - Revenue was 5,902 B in Q2 (5,945 B in Q1) = disapointing aspect - Expenses down - Imporved EBITDA margins - Free Cash Flow: 811 M in Q2 (852 M in Q1); expected outlook for FCF 2018 increased to 3,6 to 3,8B (till now 3,15 to 3,35 B) - For the dividend (2,3 B per year) that means the payout ratio will be in a range of app 64 % to 60,5% in 2018 - net debt to adj EBITDA ratio down to 4.2 x; (4.3 x in previose quarter) - Long-Term Debt & Credit Facilities down from 36,94 B at end of Q1 to 36,878 B (37,238 B end Q4 17) Conference call: - Intergration Level 3 is going well - Expect further increasing EBITDA margins in the future - Expect further increasing FCF in the future - no revenue guidance - no questions or comments on the dividend, according to the outlook dividend will stay at 0.54$ per quarter (2.16$ per year) Transcript: https://seekingalpha.com/article/4196789-centurylink-ctl-q2-2018-results-earnings-call-transcript?source=email_rt_article_readmore&dr=1 Link to comment Share on other sites More sharing options...
petec Posted August 8, 2018 Share Posted August 8, 2018 Did they clarify how much of the fcf is one-offs (tax etc)? Link to comment Share on other sites More sharing options...
Guest longinvestor Posted August 8, 2018 Share Posted August 8, 2018 Did they clarify how much of the fcf is one-offs (tax etc)? Yes, they did. Someone asked a question about this. It's mostly synergy driven and Sunit pointed to the increased guidance on FCF. Link to comment Share on other sites More sharing options...
Valuehalla Posted August 8, 2018 Share Posted August 8, 2018 They said that the taxrefund of Q2 was mentioned already in the outlook given in Q1. The taxrefund in Q3 is spended in the pensionplan, so neutral. So I understand that clearly, like Longinvestor does as well, the increased given outlook for FCF is not based in taxrefunds, but in increased EBITDA, syernergies and business. Its a fundamental increase of the guidance, driven by synergies. Link to comment Share on other sites More sharing options...
petec Posted August 9, 2018 Share Posted August 9, 2018 I wasn't suggesting the increase was due to tax refunds - I'm just trying to figure out what recurring FCF is. Here's my take on the results: All the commentary about how they are transforming the business is very positive and hopefully we start to see the results over the next few quarters. The EBITDA guidance increase is nice but ultimately meaningless. They are extracting synergies faster, which boosts 2018 ebitda, but they're not guiding to higher final synergies, so recurring earnings power is not higher than previously expected. I'm more interested in (and confused by) recurring FCF. New guidance for 2018 is $3.6-3.8bn, but on the Q1 call they disclosed $550m worth of one-off boosts to 2018 FCF including the q1 tax refund, early bonuses, and working capital gains. That suggests recurring FCF is $3-3.25bn. That's a very good number vs a $20bn market cap, especially given that they are still talking about 40-42% ebitda margins eventually which in round numbers is another $500-1bn in ebitda and, if you tax that at 20%, another $400-800m in FCF. That's great - anything around the $3.5bn mark in recurring FCF makes this stock insanely cheap IMHO. What I find confusing is that the FCF guidance increase is $450m, much larger than the EBITDA guidance increase of $200m. Why? The capex guide is down a touch in absolute terms but not enough to explain the difference. It's not clear to me why recurring FCF should be higher if recurring ebitda hasn't increased (see above) and if capex guidance hasn't fallen (still 16% of revenues). I wonder if there is another one off in there, in which case recurring FCF might be in the high $2bn range rather than the low $3bn range. Link to comment Share on other sites More sharing options...
Guest longinvestor Posted August 16, 2018 Share Posted August 16, 2018 Early days of cheery consensus? Analysts have moved away from a “Don’t touch it” to a lovefest stock in less than a year. Link to comment Share on other sites More sharing options...
petec Posted August 16, 2018 Share Posted August 16, 2018 Hope so! Link to comment Share on other sites More sharing options...
walkie518 Posted August 22, 2018 Share Posted August 22, 2018 it's likely still fairly cheap here? should revs stabilize further we might have ourselves a fair amount of room to run? Link to comment Share on other sites More sharing options...
petec Posted August 22, 2018 Share Posted August 22, 2018 it's likely still fairly cheap here? should revs stabilize further we might have ourselves a fair amount of room to run? Likely, yes, especially today, and especially if you assume >$3bn in recurring FCF (see my post above). But MN (who downgraded today) are right that there is no certainty that revenues will stabilise. My bet is that the transformation and simplification of the company will enable the new management to grow the combined business, but that has not yet been proven. Link to comment Share on other sites More sharing options...
Valuehalla Posted August 22, 2018 Share Posted August 22, 2018 I agree that the revenue was the weak point in the Q1 figures. I expected more than 6 B which came not true. In case of LVLT Storey and Patel stabilized the revenue and than it started to grow slightly in the end. Link to comment Share on other sites More sharing options...
Valuehalla Posted September 6, 2018 Share Posted September 6, 2018 Sunit Patel, CFO, CenturyLink, today took part in Bank of America - Merrill Lynch 2018 Media, Communications and Entertainment Conference: - Strong commitment on the dividend. They are able and willing to maintain it. - Expecting growing EBIDTA over the next years. - Exercised restraint on the revenue development, sounded to me like expecting further shrinking revenue, but due to synergies and cost savings better margins, better EBITDA, FCF - 5G, Dark Fiber, On-Net buildings, SD WAN as positive business drivers for the future Link to comment Share on other sites More sharing options...
walkie518 Posted September 6, 2018 Share Posted September 6, 2018 Sunit Patel, CFO, CenturyLink, today took part in Bank of America - Merrill Lynch 2018 Media, Communications and Entertainment Conference: - Strong commitment on the dividend. They are able and willing to maintain it. - Expecting growing EBIDTA over the next years. - Exercised restraint on the revenue development, sounded to me like expecting further shrinking revenue, but due to synergies and cost savings better margins, better EBITDA, FCF - 5G, Dark Fiber, On-Net buildings, SD WAN as positive business drivers for the future buying more? Link to comment Share on other sites More sharing options...
Valuehalla Posted September 6, 2018 Share Posted September 6, 2018 For sure its still a buy. Compare marketcap and FCF! For myself, i have enough, app. 10 % of my portfolio is in CTL now. I keep it and enjoy the dividend. If price would be tomorrow above 31, i will sell or reduce the position. Link to comment Share on other sites More sharing options...
Valuehalla Posted September 13, 2018 Share Posted September 13, 2018 A report about the new simplified consumer-offer "Price for Life" https://seekingalpha.com/article/4205519-next-centurylinks-10-percent-yield Link to comment Share on other sites More sharing options...
Valuehalla Posted September 25, 2018 Share Posted September 25, 2018 CFO Patel is leaving CTL http://www.snl.com/Cache/c395119114.html https://seekingalpha.com/news/3392562-centurylink-minus-3_8-percent-cfo-patel-exit-post-t-mobile https://finance.yahoo.com/news/centurylink-cfo-departure-worry-investors-165900469.html?.tsrc=applewf Link to comment Share on other sites More sharing options...
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