"My post was not intended as a reincarnation of a thesis, but merely sharing my thesis, which remains unchanged as of today, but I wrote it in November 2015."
This still has nothing to do with FTR.
Most of the upgrades FTR received in 2015 were in mid-2015 in connection with selling new FTR debt and equity. That's thw way Wall Street works -- don't get sucked in because those firms wanted to place FTR securities in exchange for fees. Just look at what has happened to FTR's share price since new shares were sold for $5 -- a Wall Street joke on the public. Here is what a Citi analyst who had upgraded FTR in mid-2015 had to say on Nov 3, 2015:
"Frontier Communications (NASDAQ:FTR) has now sunk 6.2% to its lowest point today -- that, after posting Q3 numbers that looked strong on a headline basis, with profits beating expectations and revenue growth of 25%.Citi's Michael Rollins thinks some other numbers show some weakness, calling the results "mixed" and rating the stock "high risk."Revenue of $1.42B was in line with consensus, he notes, and "below our estimate of $1.43B, inclusive of $71M recognized for CAF-II and gross regulatory revenue of $201M vs. our estimate of $193m."Other numbers weren't as impressive as the EPS as well, he says, though Citi's expectations were high compared to other analysts: "Revenue from the acquired CT properties was flat sequentially at $264m ... Norm. consolidated OIBDA of $588M was below our $623M estimate and consensus at $604M. EPS of $0.03 was below our estimate of $0.06 and better than consensus at ($0.01)."He's got a price target of $5.75 -- that's 18.8% implied upside from the current price of $4.84."
The estimate for Q4 is -$.03 EPS and -$.19 for 2016. Looks sad.
I must have missed something, what does the reincarnation of your November 2015 thesis have to do with FTR?
Also you wrote, "Verizon wireline purchase should be more accretive to cash flow than originally expected." I haven't seen anything published lately other than two of the VZ#2w deal releasing that FTR had its outlook revised down. Can you cite a published report that lists the original cash flow estimates and any revised up? Thanks...
"BBB- is not a junk rating. It's the lowest rating above junk."
I said, "BBB- I believe" so I didn't have it right -- I put in one too many B's.
FTR's site lists a S&P rating of BB- which is commonly called a junk rating -- BB+, BB, BB- put FTR 3 rungs into junk per S&P's lingo. I can't say that I've seen a "BB+" so I'm just assuming BB+ means a positive outlook, then BB, and BB- means a negative outlook. I believe I have read that about FTR in published articles. Here is the quote from S&P's site about rating BB:
"An obligation rated 'BB' is less vulnerable to nonpayment than other speculative issues. However, it faces major ongoing uncertainties or exposure to adverse business, financial, or economic conditions which could lead to the obligor's inadequate capacity to meet its financial commitment on the obligation."
I think this level of rating is adding to FTR's stock price fall and market weakness. That was my point -- junk bonds have been volatile and a big reason for it is most junk credits need refinancing in the future. The whole market seems to have become risk averse since world currency questions and economic outlook. In telecom, money has been flowing into VZ and T for safety. Those two have bases that are estimated to have organic revenue growth going forward.
The firm "S&P" rates debt. FTR and other clients pay S&P for their rating service because for practical purposes all corporations with public debt need to have an S&P rating. Currently S&P rates FTR debt as BBB- I believe -- three rungs down into the so-called junk level. The firm "S&P Capital IQ" has the same parent company, McGraw Hill, but it's S&P Capital IQ that rates equities. The two firms don't share info because it would be a violation of SEC regs to do so. S&P requires its clients to provide certain data and answers to questions that are confidential info. S&P Capital IQ has to rely on public info only per SEC Regulation FD (Fair Disclosure) which requires that anything that is told to Wall Street analysts must be told to the public at the same time. S&P Capital IQ sells data bases and services to Wall Street firms. The equity research comes along with the data packages. many discount brokers offer S&P Capital research reports to clients for free. Other free research is Argus & Ned davis who sell data services to brokerage firms.
Many of the firms that rated FTR after the current VZ purchase also served as underwriters for new FTR equity and debt for that deal. Wall Street seems to get deals done one way or another. It's hard to sell debt and be neutral about it with prospective buyers. One of underwriters was Citi and another Morgan Stanley. I believe both have revised their estimates down recently.
There are a lot of pros trading FTR. That's where the big volume, big short position and erratic share price movements come from -- FTR is in play.
Expressed as a probability:
I like Bernie's idea of a $.25 tax on toilet paper. The extra soft rolls that the rich favor should be taxed at $.50 plus an across the board dump fee of $.10.
However, any man, rich or poor, should be able to wizz for free.
"Sorry I certainly didn't mean to mislead anyone to say that FTR would surprise...if fact they most likely will not.... "
Huh? You didn't mean this:
" Shorts won't keep this stock down for long. Surprise earnings will rocket this stock to $6.00 per share. If FTR cuts their dividend, there will be another $2.00 surge to $8.00 per share. Watch and learn"
Look mr wizard, as you have been told, sage is in charge of double talk here. Quit trying to eat out of his rice bowl. Sorry, no empty slots here. Move on...
the wizard wrote:
"Surprise earnings will rocket this stock to $6.00 per share."
You say "surprise earnings"?
Where will the surprise earnings come from? Did somebody find a spool of wire spun from gold?
Put up or shut up.
He's had the same MO for years -- notice he hasn't posted while his 3 new ID's took over?
FTR seems to have shifted out of the Mopar rut it was in between 383 and 413.
It's possible there will be a pull to the 426 HEMI level, or FTR could be in a new GM gear at the classic 427 level. Be careful of a possible pull back to the 409.
Looking down the road however, regardless of the make, FTR has zoomed ahead.
But sadly without Maggie who will soon no doubt be draining the retirement funds.