Frontier Communications - A Light At The End Of The Tunnel [View article]
Dave Crosetti-
"Having my cousin Frank play for and coach for the Yankees, I have been a life long fan of the team. "
That's awesome (even though I hate the word!). I would have never made the connection despite the last name. I remember "Cro" as the third base coach for many years, but his playing days ended before I was born. I saw many games at the old stadium, with the most memorable being game 1 of the '63 series when my Dad got tickets from a friend (That friend happened to be a friend of Koufax, who got him box seats to the game. We got his hand-me-down tix) ... Ford against Koufax. Whitey didn't have it that day, but Koufax fanned 15 (a series record until Gibson broke it) before a record crowd of 69,000. Best bleacher seats ever.
As to the DiMaggio brothers, weird coincidence. This past weekend I heard an interview with Tom Clavin who just wrote a book titled "The DiMaggios: Three Brothers, Their Passion for Baseball, Their Pursuit of the American Dream." If the book is half as good as the interview, it promises to be a great read.
Was also a fan of the early 60's Giants in the days of Mays, MCCovey, Cepeda, Marichal, and even the Alou brothers, Haller and Jim Ray Hart and Gaylord Perry a bit later.
Frontier Communications - A Light At The End Of The Tunnel [View article]
David Crosetti-
The first time I recall seeing that quote, it was by Mickey Mantle. Not surprising he would make the statement. His father (around the age of 40) died of Hodgkins and several other male relatives also died young, so Mantle figured he wasn't going to live to a ripe old age...
Frontier Communications - A Light At The End Of The Tunnel [View article]
Tom Marx-
"I think the shorts are having to cover,"
But isn't that always the case? And when the short interest is this high, and the dividend of 9%-10% has to be paid by the short, and it would take 2 months to cover, isn't the potential for a short squeeze very real?
I tend to be a holder long term, but for me FTR is about the dividend. The values of many companies seem stretched, so I am willing to let shares get taken away as long as I can get the income. Note that if my shares were called, I still pick up the equivalent of 2 dividend payments without ever receiving a dividend. Right now, with one dividend in my pocket, I've picked up three within three months. Either I get assigned in a couple of weeks or I get the equivalent of a fourth dividend. A dividend is about income, and since theses positions are in IRA's, it doesn't matter to me if the "income" is a capital gain or a dividend.
Am I willing to hold long term? Well, if I don't see continued improvement, there's a good chance I'll close the position towards the end of the year. I have less exposure to WIN, but the same holds true. If I don't see improvements, I'll need to decide whether to close the position when those calls expire. It's not like it's going to be all smooth sailing for WIN. WIN has also diversified into some highly competitive venues. I have no idea whether they will succeed with hosted solutions and data centers. I was working at a company selling cloud based solutions about 15 years ago. It's not like competition isn't rampant.
" I see FTR as a long term sell and WIN as a long term hold."
I don't think I have ever seen the phrase long term sell. Good luck with WIN.
Frontier Communications - A Light At The End Of The Tunnel [View article]
Tom Marx-
"... the risks are much higher than you are thinking."
Perhaps, although all of my recent purchases were made using simultaneous buy the stock and sell a covered call. It reduced the cost to open the positions and improved the yield. Several of those positions were called away, and the most recent buy stock/sell call transaction (at a net debit of $3.81 on 2-21-13) will likely be called away just prior to the ex-div date on June 5th - long before the $4 August call expiration.
Frontier Communications - A Light At The End Of The Tunnel [View article]
Tom Marx-
"You thinking you are smarted than the experts, and giving examples of hindsight is not really on point. I will stick with the company over casual investors analysis every day of the week."
What is on point? It is difficult to give examples of foresight.
It certainly seems like you are long WIN. It's fine that you want to defend your investment decision in WIN, but does the FACT that the experts are shorting 12% of the float deter you from making that investment. Are you thinking you are smarter than those WIN experts that are shorting the stock? What about other experts, like institutional ownership? Does it matter that it is 62% at FTR and only 38% at WIN?
" ...and shorts are REDUCING their positions."
Not by much. Granted, the short interest is down about 9% from a high reached April 15th, but it is double what it was a year ago when the price was 9% higher. Your logic would suggest it was a better buy a year ago when the price was higher. Instead, as the price fell, the short interest rose.
It all depends on how you choose your time frame and how you choose to present your facts. As I wrote, short interest - or lack of it - just isn't a great indicator.
Frontier Communications - A Light At The End Of The Tunnel [View article]
Tom Marx-
You are certainly entitled to your opinion, but short interest is not a great indicator. The most recent short interest doesn't tell much, especially since it reflects the positions before the earnings were released. Besides, "experts" can be wrong and make mistakes. Wasn't Tesla one of those heavily shorted stocks? Isn't Sirius also on that list.
Shorting can be especially costly when dividend payments need to be made. And speaking of dividends, you pointed out that the exec at WIN indicated that the dividend would not be cut. Those expert shorts don't seem to believe it. WIN has 12% of the float shorted.
Frontier Communications - A Light At The End Of The Tunnel [View article]
Tom Marx-
"1. Revenue- it is in permanent decline. "
And yet you quote the CFO who optimistically states that he sees the opportunity to halt the residential revenue decline. Frontier recognizes that it's in a competitive market place and has only recently built out the infrastructure in the acquired properties to go after the broadband opportunity. Maybe the revenue will continue to decline, but it remains to be seen whether the decline is "permanent."
"2. Cash Flow- they have fine cash flow because they are not expanding in growth areas."
I guess we have different views of growth areas. The company is investing billions in upgrading the network as demonstrated by its expanding footprint and the improved broadband speeds available in that footprint.
"3. The dividend is safe through 2013- per who, per you. What does the CEO say- nothing. "
Since she already had to eat her words once, I expect nothing in this area. From the 10Q "Dividends- We intend to pay regular quarterly dividends. "
And, with regard to short selling, it can also be viewed as a buying pressure. They have to cover at some point. As you point out, the recent rally could be from short covering.
Frontier Communications - A Light At The End Of The Tunnel [View article]
La MArque-
"So, just what is "broadband" and "hsi" definitionally? and what is the actual difference? "
I'm not particularly well-versed in all of the differentiation and am not as up to speed as I used to be when working in the business, so I welcome any corrections.
Broadband is often used interchangeably with HSI, although technically (I believe) it is a subset of HSI. HSI is more of a generic term that refers to anything above the 56kbps speed limits on a dial up modem. FTR has many forms of broadband, and in 40% of its footprint offers speeds of 20 Mbps.
DSL is offered over twisted pair while "cable" can use co-ax and fiber. Then there's satellite....
Frontier Communications - A Light At The End Of The Tunnel [View article]
tallguyz-
"My question: why in the world would anyone in the SA community waste any time on this stock when there are so many clearly better ones out there?"
I also spent some time in the telecom sector. Started working for Ma Bell in the mid-80's. As to why the interest in FTR... mostly because when screening for stocks, it shows up fairly high on a list of stocks with large dividend yields. Many folks that invest need more current income than can be provided by the low yields on those "better stocks". As long as the risks are understood, FTR can be used to provide that current income.
Frontier Communications - A Light At The End Of The Tunnel [View article]
mr_dinky_dot_bomb-
"It looked like a tuff condition to overcome for a fixed asset intensive business like FTR. Do you think FTR's EBITDA from new sales will be able to prevent this from happening in the future?"
I can't predict the future with any certainty, but it depends on how effective Frontier will be in moving the needle on broadband market share. In the past 3 years it appears that Frontier has doubled the HSI coverage in the acquired properties to more than 80%. (It's also interesting that the HSI coverage in the acquired properties now exceeds its legacy properties.) From that perspective, we should see a decline in the cap-ex (aside from government funded programs through CAF).
As a result, the heavy lifting appears done, and the leverage that comes from having put in place an infrastructure that provides for higher speeds and more efficient marketing programs should provide incrementally greater EBITDA per added dollar of revenue. Still, the company needs to prove it can add those HSI accounts and dollars of revenue.
"Also, I don't get the focus on the safety of FTR's dividend for the near term. If FTR's dividend is not seen safe for the long term it isn't a candidate to become an investment grade, buy & hold stock, is it? FTR seems like a candidate for a trade and not an investment."
I focused on the near term safety because I am more interested in the current dividend income produced by FTR. There has been a lot of discussion in the past several years about buy and hold being dead as a form of investing. While not firmly in that camp, I have recently been transforming my portfolio to include a lot of longer-term at-the-money covered call writing on dividend paying stocks. Not just for FTR, but also for companies as disparate as AAPL, INTC, MCD, BP, FUN, BGS, etc. It boosts the yield, reduces the exposure and "ensures" current income.
B&G Foods Secretive Acquisition Of TrueNorth Brand [View article]
rickevan-
"Have you tried contacting the Company's investor relations department ?"
Thanks. No, I haven't. I "lazily" assume, that although I might get an answer about why it wasn't disclosed, I won't be given any info that would be useful. The FD regulation would seem to preclude receiving useful info.
B&G Foods Secretive Acquisition Of TrueNorth Brand [View article]
ohnjross-
"... it is not unusual to give only the minimum required disclosures when a private party is invloved in the transaction. "
Thanks for the comment. Maybe there is nothing suspicious about withholding info, but why would any public company, including B&G, be reluctant to disclose the information? When it acquired the brands from Chipita, it disclosed a lot of info. Chipita, like DeMet's, is not a public company. (Although Chipita is owned by a Greek company, and it's not clear whether the parent is private or simply closely held). Even the Violet Packing acquisition, where the purchase price was not disclosed, BGS disclosed the sales, EBITDA and projected EPS impact along with a statement that it would be acquired with cash on hand.
The problem is there is no way for investors to know whether the company borrowed, or used cash on hand, to fund the acquisition, increased its leverage, or if this acquisition will be immediately accretive to earnings. We don't even know which tier B&G considers these brands. It's quite frustrating.
Liberty's Plans For Sirius XM Take Another Step Forward [View article]
DSandman999-
"Of course Malone, in his 70s, might still be in that group and doesn't have short term time frames and putting things off a year or two is fine with him. "
If you believe what he says, this is certainly the case... ""I'm a very long-term investor, despite my age," said Mr. Malone, who is 71."
It is at best something they might consider if something else chances to jeopardize the Plan, ie a bill changing the tax implications or out right removes RMTs in 2014.
Totally agree, and then some. If tax legislation that jeopardizes the RMT appears to be moving forward, I expect he'll find a way to accelerate the RMT into 2013, even if it means stuffing some other appreciated asset into Sirius or finding a way to call older debt and finance the deal with a loan from Liberty to Sirius.
Frontier Communications - A Light At The End Of The Tunnel [View article]
"Having my cousin Frank play for and coach for the Yankees, I have been a life long fan of the team. "
That's awesome (even though I hate the word!). I would have never made the connection despite the last name. I remember "Cro" as the third base coach for many years, but his playing days ended before I was born. I saw many games at the old stadium, with the most memorable being game 1 of the '63 series when my Dad got tickets from a friend (That friend happened to be a friend of Koufax, who got him box seats to the game. We got his hand-me-down tix) ... Ford against Koufax. Whitey didn't have it that day, but Koufax fanned 15 (a series record until Gibson broke it) before a record crowd of 69,000. Best bleacher seats ever.
As to the DiMaggio brothers, weird coincidence. This past weekend I heard an interview with Tom Clavin who just wrote a book titled "The DiMaggios: Three Brothers, Their Passion for Baseball, Their Pursuit of the American Dream." If the book is half as good as the interview, it promises to be a great read.
Was also a fan of the early 60's Giants in the days of Mays, MCCovey, Cepeda, Marichal, and even the Alou brothers, Haller and Jim Ray Hart and Gaylord Perry a bit later.
Great trip down memory lane...
Frontier Communications - A Light At The End Of The Tunnel [View article]
The first time I recall seeing that quote, it was by Mickey Mantle. Not surprising he would make the statement. His father (around the age of 40) died of Hodgkins and several other male relatives also died young, so Mantle figured he wasn't going to live to a ripe old age...
But what a thrill to watch him play.
Frontier Communications - A Light At The End Of The Tunnel [View article]
"I think the shorts are having to cover,"
But isn't that always the case? And when the short interest is this high, and the dividend of 9%-10% has to be paid by the short, and it would take 2 months to cover, isn't the potential for a short squeeze very real?
I tend to be a holder long term, but for me FTR is about the dividend. The values of many companies seem stretched, so I am willing to let shares get taken away as long as I can get the income. Note that if my shares were called, I still pick up the equivalent of 2 dividend payments without ever receiving a dividend. Right now, with one dividend in my pocket, I've picked up three within three months. Either I get assigned in a couple of weeks or I get the equivalent of a fourth dividend. A dividend is about income, and since theses positions are in IRA's, it doesn't matter to me if the "income" is a capital gain or a dividend.
Am I willing to hold long term? Well, if I don't see continued improvement, there's a good chance I'll close the position towards the end of the year. I have less exposure to WIN, but the same holds true. If I don't see improvements, I'll need to decide whether to close the position when those calls expire. It's not like it's going to be all smooth sailing for WIN. WIN has also diversified into some highly competitive venues. I have no idea whether they will succeed with hosted solutions and data centers. I was working at a company selling cloud based solutions about 15 years ago. It's not like competition isn't rampant.
" I see FTR as a long term sell and WIN as a long term hold."
I don't think I have ever seen the phrase long term sell. Good luck with WIN.
Frontier Communications - A Light At The End Of The Tunnel [View article]
"... the risks are much higher than you are thinking."
Perhaps, although all of my recent purchases were made using simultaneous buy the stock and sell a covered call. It reduced the cost to open the positions and improved the yield. Several of those positions were called away, and the most recent buy stock/sell call transaction (at a net debit of $3.81 on 2-21-13) will likely be called away just prior to the ex-div date on June 5th - long before the $4 August call expiration.
Frontier Communications - A Light At The End Of The Tunnel [View article]
"You thinking you are smarted than the experts, and giving examples of hindsight is not really on point. I will stick with the company over casual investors analysis every day of the week."
What is on point? It is difficult to give examples of foresight.
It certainly seems like you are long WIN. It's fine that you want to defend your investment decision in WIN, but does the FACT that the experts are shorting 12% of the float deter you from making that investment. Are you thinking you are smarter than those WIN experts that are shorting the stock? What about other experts, like institutional ownership? Does it matter that it is 62% at FTR and only 38% at WIN?
" ...and shorts are REDUCING their positions."
Not by much. Granted, the short interest is down about 9% from a high reached April 15th, but it is double what it was a year ago when the price was 9% higher. Your logic would suggest it was a better buy a year ago when the price was higher. Instead, as the price fell, the short interest rose.
It all depends on how you choose your time frame and how you choose to present your facts. As I wrote, short interest - or lack of it - just isn't a great indicator.
Frontier Communications - A Light At The End Of The Tunnel [View article]
You are certainly entitled to your opinion, but short interest is not a great indicator. The most recent short interest doesn't tell much, especially since it reflects the positions before the earnings were released. Besides, "experts" can be wrong and make mistakes. Wasn't Tesla one of those heavily shorted stocks? Isn't Sirius also on that list.
Shorting can be especially costly when dividend payments need to be made. And speaking of dividends, you pointed out that the exec at WIN indicated that the dividend would not be cut. Those expert shorts don't seem to believe it. WIN has 12% of the float shorted.
Frontier Communications - A Light At The End Of The Tunnel [View article]
"1. Revenue- it is in permanent decline. "
And yet you quote the CFO who optimistically states that he sees the opportunity to halt the residential revenue decline. Frontier recognizes that it's in a competitive market place and has only recently built out the infrastructure in the acquired properties to go after the broadband opportunity. Maybe the revenue will continue to decline, but it remains to be seen whether the decline is "permanent."
"2. Cash Flow- they have fine cash flow because they are not expanding in growth areas."
I guess we have different views of growth areas. The company is investing billions in upgrading the network as demonstrated by its expanding footprint and the improved broadband speeds available in that footprint.
"3. The dividend is safe through 2013- per who, per you. What does the CEO say- nothing. "
Since she already had to eat her words once, I expect nothing in this area. From the 10Q "Dividends- We intend to pay regular quarterly dividends. "
And, with regard to short selling, it can also be viewed as a buying pressure. They have to cover at some point. As you point out, the recent rally could be from short covering.
Frontier Communications - A Light At The End Of The Tunnel [View article]
"So, just what is "broadband" and "hsi" definitionally? and what is the actual difference? "
I'm not particularly well-versed in all of the differentiation and am not as up to speed as I used to be when working in the business, so I welcome any corrections.
Broadband is often used interchangeably with HSI, although technically (I believe) it is a subset of HSI. HSI is more of a generic term that refers to anything above the 56kbps speed limits on a dial up modem. FTR has many forms of broadband, and in 40% of its footprint offers speeds of 20 Mbps.
DSL is offered over twisted pair while "cable" can use co-ax and fiber. Then there's satellite....
Frontier Communications - A Light At The End Of The Tunnel [View article]
"My question: why in the world would anyone in the SA community waste any time on this stock when there are so many clearly better ones out there?"
I also spent some time in the telecom sector. Started working for Ma Bell in the mid-80's. As to why the interest in FTR... mostly because when screening for stocks, it shows up fairly high on a list of stocks with large dividend yields. Many folks that invest need more current income than can be provided by the low yields on those "better stocks". As long as the risks are understood, FTR can be used to provide that current income.
Frontier Communications - A Light At The End Of The Tunnel [View article]
"...but one needs a strong stomach to hold it."
You're welcome. As noted elsewhere, using calls to reduce exposure lessens the need for antacids. ;-)
Frontier Communications - A Light At The End Of The Tunnel [View article]
"It looked like a tuff condition to overcome for a fixed asset intensive business like FTR. Do you think FTR's EBITDA from new sales will be able to prevent this from happening in the future?"
I can't predict the future with any certainty, but it depends on how effective Frontier will be in moving the needle on broadband market share. In the past 3 years it appears that Frontier has doubled the HSI coverage in the acquired properties to more than 80%. (It's also interesting that the HSI coverage in the acquired properties now exceeds its legacy properties.) From that perspective, we should see a decline in the cap-ex (aside from government funded programs through CAF).
As a result, the heavy lifting appears done, and the leverage that comes from having put in place an infrastructure that provides for higher speeds and more efficient marketing programs should provide incrementally greater EBITDA per added dollar of revenue. Still, the company needs to prove it can add those HSI accounts and dollars of revenue.
"Also, I don't get the focus on the safety of FTR's dividend for the near term. If FTR's dividend is not seen safe for the long term it isn't a candidate to become an investment grade, buy & hold stock, is it? FTR seems like a candidate for a trade and not an investment."
I focused on the near term safety because I am more interested in the current dividend income produced by FTR. There has been a lot of discussion in the past several years about buy and hold being dead as a form of investing. While not firmly in that camp, I have recently been transforming my portfolio to include a lot of longer-term at-the-money covered call writing on dividend paying stocks. Not just for FTR, but also for companies as disparate as AAPL, INTC, MCD, BP, FUN, BGS, etc. It boosts the yield, reduces the exposure and "ensures" current income.
I'm glad you enjoyed Jim Pyke's article.
Frontier Communications - A Light At The End Of The Tunnel [View article]
Thanks.
B&G Foods Secretive Acquisition Of TrueNorth Brand [View article]
"Have you tried contacting the Company's investor relations department ?"
Thanks. No, I haven't. I "lazily" assume, that although I might get an answer about why it wasn't disclosed, I won't be given any info that would be useful. The FD regulation would seem to preclude receiving useful info.
B&G Foods Secretive Acquisition Of TrueNorth Brand [View article]
"... it is not unusual to give only the minimum required disclosures when a private party is invloved in the transaction. "
Thanks for the comment. Maybe there is nothing suspicious about withholding info, but why would any public company, including B&G, be reluctant to disclose the information? When it acquired the brands from Chipita, it disclosed a lot of info. Chipita, like DeMet's, is not a public company. (Although Chipita is owned by a Greek company, and it's not clear whether the parent is private or simply closely held). Even the Violet Packing acquisition, where the purchase price was not disclosed, BGS disclosed the sales, EBITDA and projected EPS impact along with a statement that it would be acquired with cash on hand.
The problem is there is no way for investors to know whether the company borrowed, or used cash on hand, to fund the acquisition, increased its leverage, or if this acquisition will be immediately accretive to earnings. We don't even know which tier B&G considers these brands. It's quite frustrating.
Liberty's Plans For Sirius XM Take Another Step Forward [View article]
"Of course Malone, in his 70s, might still be in that group and doesn't have short term time frames and putting things off a year or two is fine with him. "
If you believe what he says, this is certainly the case... ""I'm a very long-term investor, despite my age," said Mr. Malone, who is 71."
The above is from an interview last summer (see http://on.wsj.com/P58EXe )
It is at best something they might consider if something else chances to jeopardize the Plan, ie a bill changing the tax implications or out right removes RMTs in 2014.
Totally agree, and then some. If tax legislation that jeopardizes the RMT appears to be moving forward, I expect he'll find a way to accelerate the RMT into 2013, even if it means stuffing some other appreciated asset into Sirius or finding a way to call older debt and finance the deal with a loan from Liberty to Sirius.