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Consolidated Communications Holdings Inc. Message Board

  • gambler099 gambler099 Feb 16, 2007 10:51 AM Flag

    Why the Downgrade by Citi ?

    Does anybody have any information on why Citigroup downgraded CNSL to a SELL today?

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    • valuation

    • It is just one analyst. It did drop on Friday. But then came back up close its 50 day average. The dividend is solid at 7%. So it is a long term buy.

    • Why one anylist has that much influence is beyond me. The same thing happened to American Capital Strategies (ACAS) earlier this week. It went down 7 points and back up 7 points. I humg on because of the dividend.

      I bought CNSL at $20.02. So I am back in the black.

      • 1 Reply to humpdy2
      • you shudda bought it at 20.20...ha...

        these analysts think they know what a stock should be priced at... Whenever I think about whether they are right or not relative to what the market is gonna do..i think of stocks like Pfizer. 5 o 6 analysts have rated this low divvy paying pig a strong buy for over 5-6 years now and the stock has gone nowhere. Like they know. I used to hate them. Still do to a i use them to create buy points.

    • I think you have to look at the incrediable appreciation over the last 9 months. I bought CNSL with the yield at 10% range; FRP in the 13% range, and WIN in the 9% range. Today all are near or at 7%.

      The RLEC play is all in the yield- the growth story is non existant, even with potential for video.

      How much more is CNSL going to go up? 10 yr treas is in the 4.7% range = risk free. If stock goes to 23.80; yield is 6.5%. Unless you have a major drop in the 10 yr yield- not going to happen.

      The payout ratio is in the mid 70%. Rev growth and free cash flow growth is stagnant. Not much room for payout.

      The majority of RLECs are at this juncture- see FRP, IWA, WIN, etc. Stocks have had some major appreciation over the last 12 months (starting point was 10-13% dividend yields).

      Bottom line- these stocks are nice to hold for the yield (7%)- but do not now offer a big upside like last year- including CNSL.

    • I have noticed lately that every single one of my stocks that have done well, have been systematically downgraded by some *anal*yst, and then they take a big dive..then take weeks to recover. Usually the *anal*lyst prick is AGE (AG Edwards)..who has apparently been on the prowl lately. This time its Citi. Its always someone. Take any stock that is doing well..and eventually some analyst will downgrade it. Happens every time. Look at it as a buying opportunity to pick up more yield.

    • Can only suspect total incompetence. They downgraded TEX a while back to SELL and it took a dive. Today they upgraded to BUY.

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