Myth465 Posted October 4, 2011 Author Share Posted October 4, 2011 I plan to buy more, at a 15% or 20% yield. Management seems to be tackling the challenge though anything could happen. Link to comment Share on other sites More sharing options...
Shane Posted October 9, 2011 Share Posted October 9, 2011 Anyone else concerned we aren't seeing key insider buying at these prices? Kathleen Abernathy made a meaningful purchase - but she is a lawyer. I don't think she is heavily involved in operations or overseeing strategic progress. Any insight? Link to comment Share on other sites More sharing options...
Sea Island Posted November 3, 2011 Share Posted November 3, 2011 After today's earning release, is the fear that they will continue to lower FCF guidance until they ultimately cut the dividend which was reaffirmed today? I am trying to see what I am missing as this seems like a very attractive level to be adding to my position, Link to comment Share on other sites More sharing options...
ourkid8 Posted November 16, 2011 Share Posted November 16, 2011 I feel this is a great move as Frontier continues to build a deeper relationship with the consumer while continuing to provide bundle packages. Once the migration onto Frontier's systems is complete, I cannot wait for all the growth opportunities which exist... ie. Cloud offerings! http://www.bloomberg.com/news/2011-11-15/frontier-communications-to-add-mobile-with-at-t-resale-accord.html?cmpid=yhoo Link to comment Share on other sites More sharing options...
finetrader Posted November 16, 2011 Share Posted November 16, 2011 Cloud offering?? this is a telco , they make money transporting data between customer and central office. I don't believe in cloud to improve profitability meaningfully for telcos. Also the deals they make with wireless and television operators is only to be able to offer bundled solutions (3-4 services), but I don't think they make much money on those services. Link to comment Share on other sites More sharing options...
ourkid8 Posted November 16, 2011 Share Posted November 16, 2011 I agree, It is to build a deeper relationship with the customer and yes to continue to build on the bundled solutions since it adds to the stickiness of the customer. The CEO has mentioned, #1 job is integration and then #2 is increased product suites which is what they are focused on right now. They currently provide hosting services (cloud offerings) in large markets (Rochester) and wants to organically grow services as acquisitions in this space are expensive. Cloud offering?? this is a telco , they make money transporting data between customer and central office. I don't believe in cloud to improve profitability meaningfully for telcos. Also the deals they make with wireless and television operators is only to be able to offer bundled solutions (3-4 services), but I don't think they make much money on those services. Link to comment Share on other sites More sharing options...
biaggio Posted November 16, 2011 Share Posted November 16, 2011 my understanding is that the telco business is in decline, hopefully can stabilize to ~1% per year + will be countered by new product sales (broadband, wireless service etc) Combine this with a lot of debt + I am not sure how big if any is their "enduring competitive advantage" I am keeping this to a fairly small position. I think one should be careful here. I like the dividend but don t like being down 25%(market has shrunk my position some for me, LOL) Link to comment Share on other sites More sharing options...
biaggio Posted November 26, 2011 Share Posted November 26, 2011 CEO bought 48,000 shares last week at $5.25 http://www.gurufocus.com/StockBuy.php?symbol=FTR Link to comment Share on other sites More sharing options...
ourkid8 Posted November 26, 2011 Share Posted November 26, 2011 This is definitely wonderful news and a vote of confidence on the sustainability of the dividend! S CEO bought 48,000 shares last week at $5.25 http://www.gurufocus.com/StockBuy.php?symbol=FTR Link to comment Share on other sites More sharing options...
roughlyright Posted November 28, 2011 Share Posted November 28, 2011 I was thinking of dipping my toes in in Frontier. However, I noticed that it's Altman Z-Score as it shows at Gurufocus website is 0.6. Anything less than 1.8 is considered distress. This is making me nervous to dip my toes. Anybody worried about this Z Score? Link to comment Share on other sites More sharing options...
finetrader Posted November 28, 2011 Share Posted November 28, 2011 I would not because fcf in Ftr's case is much higher than earnings, so the true profitability is not represented in Z-score. Link to comment Share on other sites More sharing options...
PlanMaestro Posted January 26, 2012 Share Posted January 26, 2012 I would not because fcf in Ftr's case is much higher than earnings, so the true profitability is not represented in Z-score. There has been no updates on this thread for a while. Is there any recent facts that can justify FTR to be priced below $5? Plan Link to comment Share on other sites More sharing options...
beerbaron Posted January 26, 2012 Share Posted January 26, 2012 Funny, I actually looked at it this morning (real quick). What it seems with FTR is a under-investing in their infrastructure to generate short therm cash flow. Look at their revenues since the merger it's been going down ever since. That is as far as my analysis went, with a reminder to actually take a second look when I have more time. Also, take a look at their balance sheet full of Goodwill and Intangible. What made the acquisition so good that the assets were worth way more then the equipment's depreciation value? The customers obviously, but my guess is they are slowly moving away therefore impacting the valuations. BeerBaron Link to comment Share on other sites More sharing options...
AZ_Value Posted January 26, 2012 Share Posted January 26, 2012 Been looking at this sporadically also. To me the pounding that Mr Market has been inflicting to FTR the last few months pretty much boils down to the fact that he doesn't believe the dividend is sustainable and he is expecting it to be cut or eliminated altogether in the near future. Link to comment Share on other sites More sharing options...
biaggio Posted January 26, 2012 Share Posted January 26, 2012 Agree re dividend at risk which stems from the fact that they have not had the free cash flow initially projected -the management claims that they have accelerated capex that was planned for later- they have not sold as much new services to make up for their shrinking wireline. (off the top of my head) I was encouraged that in late 2011 they had some insider buying. http://www.gurufocus.com/stock.php?symbol=FTR Cheaply priced at EV/EBITDA=5.19 http://finance.yahoo.com/q/ks?s=FTR+Key+Statistics But not a lot of room for error due to all the debt. Link to comment Share on other sites More sharing options...
Shane Posted January 26, 2012 Share Posted January 26, 2012 I'm very skeptical that they will be able to sell new services. Hopefully in the back end of 2012 we see capex backing off. Link to comment Share on other sites More sharing options...
Packer16 Posted January 29, 2012 Share Posted January 29, 2012 The cap-ex tail-off in 2013 will add $320 m to FCF in addition to RR FCF of $1.056 b. With this amount of FCF less the $750 m in dividends, FTR should be able to approach CenturyLink level of debt in a 3.0 years. In addition, the debt is trading at 7 to 9% yields and the equity has a FCF yield of 25% (quite a spread). Just some top level numbers. Packer Link to comment Share on other sites More sharing options...
Myth465 Posted January 30, 2012 Author Share Posted January 30, 2012 I bought a bit more under $5. From where I sit the Divi looks safe, but maybe I am missing something. Q4 earnings will be interesting. Link to comment Share on other sites More sharing options...
PlanMaestro Posted January 30, 2012 Share Posted January 30, 2012 Thank you all. Brief and to the point. Plan Link to comment Share on other sites More sharing options...
Shane Posted January 30, 2012 Share Posted January 30, 2012 FTR has been perplexing to me lately. Analyst price target's are around $6.50 (They see the same information as the rest of the market), A key insider has made considerable purchases, and no stark bad news has occurred yet the stock has completely tanked while the market has been strong. It's probably lack of experience on my part but has anyone seen this before? I don't like having a highly leveraged company as a big position but I feel this selloff can't be rational. Link to comment Share on other sites More sharing options...
Sea Island Posted January 30, 2012 Share Posted January 30, 2012 The coming dividend cut and earnings weakness(or the other way around?) is what seems to have investors concearned. I have been a buyer as it seems very reasonably priced and I would welcome someone providing a stong sell case for the shares at this price level Link to comment Share on other sites More sharing options...
Myth465 Posted January 30, 2012 Author Share Posted January 30, 2012 It doesnt make sense to me, but perhaps someone knows something... I have a good slug, and think we will see at least $7.5 by 2014, but what do I know. I think they could keep the Dividend via a number of levers unless FCF literally falls off a cliff. I plan on giving it another look after earnings. You never know whats up till you know whats up. Same thing happened at ATSG and they lost a minor contract, the stock is cheap, and hasnt recovered.... Link to comment Share on other sites More sharing options...
AZ_Value Posted January 30, 2012 Share Posted January 30, 2012 I'm a coward unlike you guys, so I'll wait to take a good look at their earnings release before committing. I had bought a small position a few months back but got out to put money somewhere else. Some of their LEAPS look to be dirt cheap but the volume is really low and a person can get killed on illiquid LEAPS when things don't go your way. Link to comment Share on other sites More sharing options...
finetrader Posted January 30, 2012 Share Posted January 30, 2012 If management wants to keep their credibility they will keep the dividend. They have two more quarters to go where they are pretty tight in cash flow to cover the dividend. For Q3 2012 and beyond the synergies expenses are supposed to terminate. And after, for 2013, their capex will drop materially (320M$ annually). The challenge is to pay dividend and deleverage. But let say they cut the dividend to 0.50$/share annually, the dividend yield by today's stock price would be 12%. And at this point the dividend would be safe and they could pay a lot of debt. So anyway you look at it, it seems cheap. But the real questions is at what rate revenue will drop going forward? Lately they have had to deal with revenue drop of about 7-8% annually. And the gross margin is about 50%, so this translate into a drop of 15% annually in cash flow if they can't reduce expenses. So 15% of 1B$ FCF is about 150M$ drop in FCF annually , (again that is if they can't reduce expenses, but i think they could). I'm short 2013 5$ put. Link to comment Share on other sites More sharing options...
Sea Island Posted January 31, 2012 Share Posted January 31, 2012 Does anyone have a feeling on handicapping the earnings announcement move? What would be a material that would have to disclossed per SARBOX that would move up the release? Is moving it up bullish or bearish? It seems that may depend on what you are buying. A dividend cut may be perceived as bullish for bond holders. Link to comment Share on other sites More sharing options...
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