Rogers Communications (Symbol-RCI.B)

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JaydoubleU
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Post by JaydoubleU »

Wassup with RCI.B lately?

Is it just the absence of Ted that has taken confidence out of this company?
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Post by investor99 »

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ghariton
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Post by ghariton »

Bylo Selhi wrote:FWIW that means the CEOs of all the big-3 (Rogers, Bell and Telus) are all from Telus.
Only superficially. Nadir is from B.C. Tel. He worked at Telus shortly after the takeover, but didn't see a future for himself.

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Post by investor99 »

Growth in wireless and cable services drove up sales at Rogers Communications Inc. (RCI.B-T29.590.652.25%) a modest 5 per cent in the first quarter, but the cost of adding new smartphone customers and weakness in media operations reduced profit by 10 per cent.
Media operations weakness should not be a surprise but I have to admit I was surprised to see that this dragged their full profit down 10 points. I am guessing that there will not be much stock reaction to this today.
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Post by kcowan »

Smartphone growth is front-end loaded (like life insurance) so it will take them 3-years of profits from services to offset the subsidized cost of the device. They also cut their data charges way back to entice these users.

I was interested in their 857k subscribers to internet phone service. That seems to be great success against Ma Bell.

It seems that Nadir is following in Ted's footsteps, sacrificing margin for growth. Maybe the market was hoping to see a shift in direction?
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Post by Peculiar_Investor »

From The Toronto Star, Rogers 2 chrg fees 4 txt, too. As a shareholder, I win as a result of the incremental revenue. :D As a subscriber who doesn't text often, mostly just receive messages from my children who do have plans, I lose. :(

May need to purchase more RCI.b to collect more dividends to cover the expected incremental cost. My current RCI.b dividend stream just about pays my Rogers Wireless bill. Maybe I'll just wait and see if a dividend increase occurs as a result of the new found revenue stream.
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Post by Peculiar_Investor »

Rogers announces further buybacks, Rogers buyback a smart move - FP Trading Desk.
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Post by bindexit »

Rogers closed at $29.90 today.

I am interested for the following reasons:
-nearing its 52 week low.
-an original cable operator would complement my holding of an original telephone line operator (BCE) in the battle for business of phone, cable, internet, and wireless customers.
-dividend payer
-it is a holding in many investment portfolios that I like to copycat

I am on the fence to buy for the following reasons:
-Price to Book values for cable operators like Rogers and Shaw are very high (above 3 according to globeinvestor). I try to buy at "graham value metrics" like low PB values unless there is significant moat.
-talk of new entrants in the wireless business and competitor technical upgrades may impact Rogers dominance
- the June 22, 2009 news report of Rogers purchasing 1.4 million shares from an 'unknown' seller for $37,240,000. According to my calculations that is $26.60 a share. If this seller is accepting $26.60, why should should we pay higher today ?

I think it has a moat but will try to be patient and wait. You never know what bargains can be had at a stock exchange near you this fall.
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Post by kcowan »

I would sit on the sidelines. Not only are there the new entrants in wireless, but there is jockeying for position among the incumbents.
  • Telus is selling Internet TV
  • Telus and Bell are moving into the GSM space
  • Shaw is ramping up Shaw Direct in the east
  • Telus is marketing Expressvue in the west
  • Bell is aggressively marketing Expressvue in the east in response.
  • VOIP is gaining traction in the mainstream
IMHO Rogers is well-positioned and could reap some short-term profits but that has never been their style in the past. They could also compete on price to prevent inroads but that is also not been their style.
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Post by iluvnascar »

I have bought 4,000 shares of Rogers over the past couple of weeks and have sold Jul 30 calls on the position. In other words, I think that there is a decent chance that Rogers will waffle around between $28 and 431 for the next month or two.....but if it closes above 430 on July 17th, I'm happy to sell and book a profit.

I like all the cable companies - Rogers, Shaw and Cogeco. Rogers MAY remain a bit on the weak side because of wireless competition. I think the concern is unfounded because Rogers is a very strong competitor with the ability to "bundle" other services. And competition will expand the overall wireless universe and Rogers will benefit even if there is a lower average revenue per subscriber. Also, after watching how they blackmailed me into accepting their home phone offering, I can only say that Rogers has lots of potential to grow revenues!

I love Shaw.....but was assigned on my selling of June 18 call options. Looking to re-enter somewhere under $19. Shaw might remain weak because there is speculation that they may enter the wireless world - but again, I think the concern is way overdone.

The sleeper is Cogeco.....CCA in Toronto. Way oversold; Rogers owns a big chunk; and presently unloved due to a very small holding in Portugal that has not performed as advertised. But they will fix Portugal....and even if they don't, it's really small potatoes.

FWIW, TD has Cogeco on their Action Buy list with a target of $51 - it's presently about $28.

I really think you can buy any of them, tuck them away, and come back in a year with a major gain. (But keep an eye on them because that gain could happen anytime in a hurry!)
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Post by ghariton »

If I were to invest in a cable company -- I'm not, I believe in indexing -- I would look at Videotron/Quebecor first, and then maybe Cogeco second. They will be going up against particularly weak competition.

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Post by bindexit »

I did not know that Rogers owns some Cogeco ... interesting. I think Verizon owned Telus shares (in 2001 ?) but sold holdings (2006 ?).

Cogeco has been a top pick of Michael Sprung for his last 3 Market Call visits. His choices usually coincide with my watchlists.

I don't like the metric of high PBs for cable operators (Rogers, Shaw, Cogeco) compared to traditional telephone line operators (Bell, Telus). It is due to their growth by taking away revenues from these traditional telephone line customers. This may warrant a higher PB but for how long, won't there eventually be a threshold?

These 5 companies together are like a monopoly = 'moat' , utility. I like that as an investment but just don't understand how the future will unfold due to technology. It seems to be morphing rapidly for these categories below and difficult to predict:
- Communication by home phone, business phone, or cell
- public TV
- cable and entertainment TV
- Internet

For this reason, I would still want to add a 'cable operator' to my BCE "telephone line" holding.

I read somewhere that Roger, Bell, and Telus are working on a technology for people to transfer monies from their cell phone. I would imagine that could take away revenues from the "banks"?

I am far from being a techy in these matters and another reason why I hesitate to buy for the moment these higher PB names.

I'll keep watching and may pull the trigger by the end of fall.
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Post by bindexit »

Thanks for the comments George.

I have family in Montreal who switched from Bell home phone and went with Videotron (for phone and cable). Videotron's advantage is language and home base of 'la belle province'. There's another moat company I guess.

I totally agree about indexing. However, I have fun searching for 'undervalued' stocks or businesses with potential moat qualities.
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Post by ghariton »

bindexit wrote:Videotron's advantage is language and home base of 'la belle province'.
Actually, language is an advantage for Bell in Quebec, too. Bell's field operations have always been in French (including customer service) in Quebec. A large portion of top management has traditionally operated in French too, although this seems to have changed recently. Indeed, when I joined Bell in 1989, conversations among the top executive (Ray Cyr, Leonce Montambault, Jean Monty, Roger Tasse (my boss), Louis Tanguay) were in pretty rapid French. I would guess that only a native speaker could have followed.

And Bell has always had a very strong sponsorship presence in Montreal.

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Post by iluvnascar »

"..........I did not know that Rogers owns some Cogeco"

I'm not sure how much they own.....but it came as a revelation to me when I heard it recently on BNN-TV.

Also.....trading symbol for Videotron? I can't seem to find it?
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Post by Michael D »

iluvnascar wrote: Also.....trading symbol for Videotron? I can't seem to find it?
Quebecore Media Inc. (or World Inc., not sure).

QBR.A
QBR.B
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Post by marty123 »

iluvnascar wrote:"..........I did not know that Rogers owns some Cogeco"

I'm not sure how much they own.....but it came as a revelation to me when I heard it recently on BNN-TV.
I remember hearing about 20% of voting and 30% of all classes a few years ago. The 2008 RCI annual report now shows 6.6M shares of Cogeco Cable (~14%) and 3.4M shares of Cogeco Inc (~20%). With Cogeco holding 40% of Cogeco Cable, RCI's stake of the remaining 60% is ~23%. They are all subordinate shares. Rogers has a financial interest but full control remains with the Audet(?) family.
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Post by kcowan »

bindexit wrote:I read somewhere that Roger, Bell, and Telus are working on a technology for people to transfer monies from their cell phone. I would imagine that could take away revenues from the "banks"?.
We have been able to pay parking fees in unmanned lots by cell phone here in Vancouver. The general arena is micropayments where there is no operator and insufficent volume to justify an automated device.

It will eventually augment the transaction acquirer function such as ATMs, POS devices and automated machines like pay-at-the-pump. The banks will still control and charge for the backend processing.

I do not see it generating significant added revenues for the mobile carriers. The business model is that the 3rd party that facilitates the transaction acquisition will get a fee. This could be the telco but most likely it will be an independent. (Could be acquired of course.)
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Post by Bylo Selhi »

<OT>
kcowan wrote:We have been able to pay parking fees in unmanned lots by cell phone here in Vancouver. The general arena is micropayments where there is no operator and insufficent volume to justify an automated device.
I see a great opportunity in the center of the universe ;) [See also this.]
</OT>
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Post by kcowan »

<OT>
Bylo Selhi wrote:
kcowan wrote:We have been able to pay parking fees in unmanned lots by cell phone here in Vancouver. The general arena is micropayments where there is no operator and insufficent volume to justify an automated device.
I see a great opportunity in the center of the universe ;) [See also this.]
Yes well anyone that thinks they can take payments offline deserves everything they get. It takes very little time in this connected world for word to spread about loopholes.

In Vancouver, the unconnected credit card readers in parking lots have a 15% fraud rate. This has been consistent since the offline payment machines were installed 10 years ago. You can even buy expired cards on the internet to use for free. We also have homeless people who sit by the readers and collect cash payments then put the fraudulent transaction through on the expired cards.

Why Hogtown did not connect their readers to WiLan I cannot imagine. Perhaps we are just dealing with stupid decision-makers? Impark here are the resident experts on credit card fraud.
</OT>
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Post by Bylo Selhi »

<OT>
kcowan wrote:Why Hogtown did not connect their readers to WiLan I cannot imagine. Perhaps we are just dealing with stupid decision-makers? Impark here are the resident experts on credit card fraud.
Especially considering they even owned a downtown wireless network (before they sold it to Cogeco) :shock:
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Post by jsbarnby »

Anyone looking seriously into RCI.B? The yield is approaching 4% and Rogers has had excellent dividend growth recently. It is also a leader in the sector and has 10-15% growth forecasts in the future. Looks like a Jarislowsky type of stock to me.....except for the relatively high multiple.

Thoughts?
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Post by iluvnascar »

Rogers is a great company with outstanding potential.....and trading very inexpensively here. The biggest drag right down might be their media holdings but time heals all. You can't go wrong with Rogers.

Just as cheap (imho) is Shaw (SJR.B)....which isn't - presently - in the wireless business.

And also very cheap is Cogeco (CCA).

I recently sold Rogers but will be getting back in shortly. I also own a lot of Shaw and Cogeco (likely too much)
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Post by Michael D »

iluvnascar wrote: The biggest drag right down might be their media holdings but time heals all.
Sports Teams. This is what has been keeping me away.
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Post by Keithm »

Rogers keep calling our cell phones asking us to take a survey. I will check our next bill.........I hope it's on their dime and not a massive eat up user minutes scam.
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