Frontier Communications (FTR) has seen its shares lose more than 50% since 2010 — and gain less than 5% for the year-to-date. Heavy competition and the erosion of its key small business customer in a sluggish recovery are among the biggest culprits for the drop.
But Frontier is in the midst of a turnaround, luring new customers with low-risk “no contract” offerings. It’s also shoring up its balance sheet by shedding debt.
In the meantime, this is one of the most heavily shorted stocks in the Nasdaq, so you never know when some better-than-expected news could set off a short squeeze. Additionally, Frontier’s relatively small market cap ($4.5 billion) makes it a takeover target in the consolidation-happy telecom industry.
But even if those share-popping scenarios don’t play out, Frontier promises upside through its long-term growth forecast of 22%. And the hefty 8.9% yield on the dividend sure makes it easy to wait for whatever comes next.
Many investors appear to be quite bearish Frontier Communications Corp (FTR - Analyst Report) especially if you look at the percentage of the float that is sold short for this stock. Currently, 22.2% of the float is sold short, suggesting an extreme level of bearishness for FTR.
However, it is worth noting that earnings estimates have actually been moving higher for the company, despite the pessimism. Thanks to these rising estimates, we actually have a Zacks Rank #2 (Buy) on FTR, so we clearly don’t believe in the negativity surrounding this firm, and are instead looking for shares of FTR to move higher in the weeks ahead.