CEL = 15.62 USD, after the earnings announcement results - SOON.
I'm going to expose you 11 major problems that I believe you should know about CEL, I'll explain why In my humble opinion CEL is going to 15.62$ in a few weeks.
1) Competition is HERE and NOW and MORE is coming - these days there are 3 big cellular companies at Israel, 3 virtual are getting in at the next few weeks and other 2 with a separated infrastructure at about a month – The Market is saturated already and every person has a cell phone at Israel this days – which means that every company will get 20%-40% decrease from its current cake portion – the incomes will divide into 8 companies!!! Now there are ONLY 3 (cellcom, Partner and Pelephone).
2) The Competition got the companies to lower their prices MUCH lower from last month's sometimes 20%-40%.
3) Regulations: A. "Nituk Zika" - which means people gets the refunds for the Cell phone device even if the device was bought outside of the company – there are two loses from this regulation to Cellcom, first no incomes from devices (which was most of the profit for last two quarters!!!) and second a refund for voice calls which gets the RPU much lower than expected. – this regulation were published at the TV shows and showed how to purchase the device outside of the cellular company and get sometimes 2-3 times the price they paid as a Refund from the cellular company.
B. "Kisuriot" – which means – no more connection fees from other cellular companies when uses the neighbor's network again - MUCH Less incomes.
4) Big Loans interest burden – pays much more interest for getting the financing for the activity of the company.
5) Abroad fees are DOWN – I guess 50%-70% from last year – This days people use SMARTPHONES, last year when people took their Cell phone to vacations they paid MUCH more than this days that people took their SMARTPHONES and used Wii-Fii at everywhere to connect to applications that allows FREE Unlimited Voice/Text/Video communication.
6) The ILS/USD situation from last year to this days, the Dollar is much higher this days, Cellcom buys the devices with USD and SELLS it at ILS, could make a Lose situation if they got stocks that makes them sell the devices 2 times higher than the stores at the streets, as mentioned before, the regulations makes the companies GIVE a FULL Refund for the device that bought outside of Cellcom, sometimes 120%-200% times from the regular price.
7) People waited to get the dividend, and now when they got it, I believe they will get rid of CEL.
8) No more incomes from content as before - these days applications are downloaded directly thru the Appstore/Android Store and Cellcom doesn't get a crumb from it like before – every step is used true a Credit card and not as before at the Cellcom's invoice – times as changed.
9) No more growth engines for incomes– I don't see now any new ideas for future.
10) Warning about profits problems – if I'm right and there will be a problem with the incomes for all the reasons mentioned, Even before the earnings announcement Cellcom could tell the public about it.
11) I can't see a good reason for a positive way here.
I'll appreciate your comments before and after the earnings announcement.
All opinions expressed by me on this post are solely my opinions and do not reflect anybody elses opinions. You should not treat any opinion expressed by me as a specific inducement to make particular investment or follow a particular strategy, but only as an expression of my opinion. my opinions are based upon information that I consider as reliable, however neither its completeness or accuracy, should be relied upon as such. My statements and opinions are subject to change without notice. Past performance is not indicative of future results