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David Klein

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  • Is It Time To Buy Into Windstream's High Yield? [View article]
    You're welcome. Add Deutsche Bank to the list. They started WIN today with a hold rating. The DJ newswire was just a headline with no target price listed.
    Apr 9 02:54 PM | 0 Likes Like |Link to Comment
  • Is It Time To Buy Into Windstream's High Yield? [View article]
    LVLT issued a similar release. Basically it allows LVLT to bid on GSA work. My guess is this is similar; like being on a short list.
    http://yhoo.it/10OMiPa
    LVLT said the potential revenue was 285m over 10 years. Win did not mention the potential revenue but my guess is it's similar assuming they actually get the work.
    Apr 9 10:13 AM | 0 Likes Like |Link to Comment
  • Is It Time To Buy Into Windstream's High Yield? [View article]
    BT, that is one of the attractions; a cut of 30-40% would still have a high yield without punishing the stock too much if at all. Any cut of 50%+ would probably hit the stock hard from these levels. Then again no cut would obvious be a bargain.

    Management could alleviate many concerns by just defining a best/worst case for cash taxes after 2013. They must have a good idea on how this will play out.
    Apr 8 09:44 AM | 0 Likes Like |Link to Comment
  • Is It Time To Buy Into Windstream's High Yield? [View article]
    jrepasch, that is correct. The SP target price is $11.00. Here is some information on other specific analyst targets ranging from $7.5 to $14.25 at the following link:
    http://bit.ly/ZhS21n
    They include Raymond James,DA Davidson,UBS AG, & Nomura.
    Apr 8 09:13 AM | 0 Likes Like |Link to Comment
  • Is It Time To Buy Into Windstream's High Yield? [View article]
    drseusphd, the "what if" is how the market might react to a hypothetical dividend cut, it has nothing to do with the PE or the companies ability to pay a dividend. Not sure what data in the article you call "unfounded".
    Apr 7 10:18 PM | 1 Like Like |Link to Comment
  • Is It Time To Buy Into Windstream's High Yield? [View article]
    I should add if they could use debt for stock buybacks it would also push the interest coverage ratio closer to the limit (plus the leverage ratio), something that should be avoided.
    Apr 7 09:33 PM | 0 Likes Like |Link to Comment
  • Is It Time To Buy Into Windstream's High Yield? [View article]
    Hi CN appreciate the comments. Here are a few thoughts.

    I'll use the debt schedule in the article as a starting point. FCF will pay-down part of the $810 million of debt maturing in the third quarter of 2013, and the remaining portion with revolver borrowings. Don't know if the revolver interest rate is fixed or variable. As far as the larger debt due in the schedule depends how cash taxes, future growth, dilution etc., effect FCF after 2014. They will need to refinance; the only question is how much will need to be refinanced and how much can be paid with what is left after dividends. My guess is they will try to refinance as much as possible as soon as possible before interest rates rise. That could be one to several years from now. This is just speculation on my part.

    It might make sense (unless they cut the dividend) to buy back stock with debt but I don't think they can at this point. Why? The credit facility includes several covenants and they cannot let themselves get close to the limits. IMO they must maintain a good margin of safety in case the unexpected occurs. The main covenants are a limit on the leverage ratio and an interest coverage ratio both dependent on EBITDA. The ratios have a cushion today but all things being equal a bad EBITDA year could be a disaster so a margin of safety is a must. I haven't looked up each covenant for each credit facility but I'd say they do not want to incur any additional debt at this point which is why they are focusing on lowering the leverage ratio. I don't think they will be buying back stock with debt anytime soon. I also would not be surprised if there was a covenant restricting buy backs using debt but don't know if this is the case.
    Apr 7 09:16 PM | 0 Likes Like |Link to Comment
  • Is It Time To Buy Into Windstream's High Yield? [View article]
    Thank you linkdonald and I share your concern. I don't know if they will eventually reduce the dividend but would not be surprised if they did, however investors would be irate as happened with FTR and CTL.
    Apr 7 05:41 PM | 0 Likes Like |Link to Comment
  • Is It Time To Buy Into Windstream's High Yield? [View article]
    Thank you JayPar.
    Apr 7 03:59 PM | 0 Likes Like |Link to Comment
  • Is It Time To Buy Into Windstream's High Yield? [View article]
    If the stock hits 6 I'd be a shareholder. As the "what if" table suggests 6 would be a no-brainer (for me) unless they did something like slash the dividend by over 50%. That said I don't see the stock hitting 6 without some major event but you never know.
    Apr 7 02:37 PM | 1 Like Like |Link to Comment
  • Is It Time To Buy Into Windstream's High Yield? [View article]
    Thank you dorbeckistane. I have CTL on my watch list at the link given in my first reply to maybenot. One of these days. It's just a time constraint.
    Apr 7 02:27 PM | 1 Like Like |Link to Comment
  • Is It Time To Buy Into Windstream's High Yield? [View article]
    Thank you jpmj. If they did cut the dividend by 30-40 cents it would take much of the risk out and strengthen the balance sheet. Good for those kicking the tires but would create a tidal wave of anger among existing shareholders considering WIN's comments, although they are not guarantees. Then again if the stock drops low enough that also will lower the risk. I'm probably closer to your camp when it comes to risk.
    Apr 7 02:18 PM | 1 Like Like |Link to Comment
  • Is It Time To Buy Into Windstream's High Yield? [View article]
    DrJim, sometimes insider buying occurs well in advance of good news but in WIN's case I'm not convinced they are sure how high the cash tax costs will go in 2014. This one is very tough to gauge (for me). A little too much uncertainty at the present time for me.

    At this point I think VZ is more "toppy" than T. Don't own either.
    Apr 7 01:28 PM | 0 Likes Like |Link to Comment
  • Is It Time To Buy Into Windstream's High Yield? [View article]
    Thank you maybenot, I owned T up until last year and sold around $37 when it crossed not only my fair value but hit my sell target. That was then and now with updated financials my model generates a fair value of $36 which generates a sell target of $41. T is a hold IMO with a yield of 4.7%.

    I know, I know, I should have held but I have strict rules for buy and sell targets based around FV and last year my FV & sell target were less. Takes the emotion out of the decision. Overall it works well.

    I was called out of T because my strategy includes selling covered calls at the sell target price. I use this strategy vs open market selling because in many cases the stock falls back below the sell target and the premium becomes added income although in T's case I bought in 2008 and the first time I wrote covered calls in 2012 I was called out. Can't complain since this one was in the green.

    Stocks I'm watching today have results for FV sell and buy targets at http://bit.ly/ABzISk
    I'm always interested in other FV views should anyone have opinions about the data.
    Apr 7 01:14 PM | 3 Likes Like |Link to Comment
  • Frontier's Announcements Spook Investors [View article]
    CN, I use another brokerage firm and noticed the dividend did not show up when I checked the history but I did notice that the cash balance was increased by the amount of the dividend but its still not listed. Anyway thought I'd share in case it's the same at Schwab.
    Mar 31 09:44 AM | 0 Likes Like |Link to Comment
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