BCE (Symbol-BCE)

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ghariton
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BCE (Symbol-BCE)

Post by ghariton »

Good news: the yield just went up.

Georges

[Full disclosure: I don't own securities issued by any telecommunications supplier in Canada]
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Shakespeare
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Post by Shakespeare »

In for 200 @ $27.82 as I reboost my portfolio yield, a little at a time.

Interestingly, my entry point today is almost identical to my previous entry point....
Sic transit gloria mundi. Tuesday is usually worse. - Robert A. Heinlein, Starman Jones
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Shakespeare
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Post by Shakespeare »

Sic transit gloria mundi. Tuesday is usually worse. - Robert A. Heinlein, Starman Jones
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Post by unicef01 »

http://makeashorterlink.com/?T2B63271C

UPDATE 3-BCE profit disappoints as cost cuts

-----------
From G&M

"TORONTO — BCE Inc., owner of Canada's biggest telephone company, reported Wednesday that third-quarter profit grew more than five-fold, as it recovered from a one-time charge a year earlier."




interesting how the media adds their own spin to the story
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yielder
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Post by yielder »

Dominion Bond Rating Service has today downgraded the ratings of the short-term debt, long-term debt, and preferred shares for Bell Canada (“Bell” or the “Company”) and Bell Mobility Cellular Inc. All trends have been changed to Stable from Negative. DBRS has also downgraded the ratings of BCE Inc. (“BCE”), Aliant Inc., and Aliant Telecom Inc.

This rating action reflects pressure on Bell Canada’s core residential local voice business, where cable telephony competition has already begun to have an impact in terms of access line erosion and declining local and long-distance revenues. In addition, while the Company continues to shift its revenues to growth areas such as wireless, DSL, video, and business ICT services, the combined effect is that Bell is experiencing EBITDA pressure as cost-reduction initiatives have so far not mitigated the effect of the shift in revenues toward these lower-margin businesses. Bell’s liquidity and coverage ratios are not expected to improve substantially over the near term and will not equate the level of other incumbent telcos rated A (high). In addition, Bell’s gross debt levels have increased over the near term, and will likely not decline substantially through the generation of free cash flow.

Although Bell’s financial metrics have not deteriorated, the previous A (high) rating was substantially supported by the Company’s superior business risk profile, which is no longer the case with the evidence of local voice competition already having an adverse effect. All of these concerns were outlined in DBRS’s press release of May 4, 2005, when Bell’s ratings were originally placed on Negative trend.

DBRS notes that Bell’s current financial metrics, along with evidence of increased business risk, are still indicative of a telco credit in the “A” category with a Stable trend based on Bell’s substantial size and scale, the strength of Bell’s brand name, the diversity of Bell’s products and services, and its strong liquidity and sizeable, albeit declining, cash flow.

Bell’s new ratings could, however, face further pressure if one of the following were to occur over the near term:

(1) DBRS expects that residential access line losses will decline at no more than approximately 5% on a year-over-year basis in the near term, with a corresponding decline in local access revenues. Any declines that approach 10% could cause further rating action.

(2) DBRS also anticipates that Bell will fully implement on its proposed cost-reduction initiatives and adopt further initiatives if required, thus stemming cash flow declines as the local market competition becomes even more intense. Further declines in Bell’s EBITDA margin, especially if it were to fall below 40% on an overall basis, could lead to a negative rating action.

(3) Lastly, if asset sales/divestitures were to materialize in the near term, DBRS would expect that the proceeds would be used in a balanced manner, including further debt reduction at Bell Canada or BCE to further underpin the new ratings. If these proceeds were predominantly used to facilitate share repurchases or increase dividends at BCE, a negative rating action could be warranted.

DBRS is hosting a teleconference today, at 4 pm EDT, to discuss the rating actions.

To participate in the teleconference, please dial the appropriate number listed below, five minutes before the start time.

North American callers: 1-866-898-9626
International callers: +1-416-340-2216
The confirmation code to access the teleconference is 3167215#

Instant replay will be available until the close of business November 10, 2005, by dialing the appropriate number below.

North American callers: 1-800-408-3053
International callers: +1-416-695-5800
The code to access the replay is 3167215#
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Shakespeare
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Post by Shakespeare »

I think telcos are now traders, not holders: you buy them when they are cheap and sell them if the price jumps enough or if something better shows up.
Sic transit gloria mundi. Tuesday is usually worse. - Robert A. Heinlein, Starman Jones
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ghariton
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Post by ghariton »

Shakespeare wrote:I think telcos are now traders, not holders: you buy them when they are cheap and sell them if the price jumps enough or if something better shows up.
Absolutely agree.

I can't think of a single security today that I would be willing to "buy and hold", apart from RRBs, of course, of course. But telco stocks seem particularly dangerous to me. The competitive marketplace is changing much too quickly, and nobody knows what the industry will look like two years from now.

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Shakespeare
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Post by Shakespeare »

Sic transit gloria mundi. Tuesday is usually worse. - Robert A. Heinlein, Starman Jones
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Post by dakota »

Shakespeare wrote:I think telcos are now traders, not holders: you buy them when they are cheap and sell them if the price jumps enough or if something better shows up.
I also agree and am still waiting for my order of MBT
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Shakespeare
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Post by Shakespeare »

Now yielding almost 5%, based on yesterday's close of $26.60.

I may pick up some more at the open, if the price is right.

Added: Filled at $26.55.
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ghariton
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Post by ghariton »

Shakespeare wrote:Filled at $26.55.
A brave man. :wink: :wink: :wink:

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Shakespeare
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Post by Shakespeare »

A brave man.
Safer than MBT, which I did not double down.

BCE can sell the G&M yet. And I'm hoping for an exit at above $30 with a few dividends.
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Post by scomac »

Shakespeare wrote:
A brave man.
Safer than MBT, which I did not double down.
Well....I guess I'm brave too. :roll: I bought some BCE this morning as well. I decided to switch MBT for BCE so that I could realize a capital loss to help off-set a significant capital gains tax liability I'm facing this year.
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Post by randomwalker »

added to BCE position last week still holding MBT. "Brave and cazy?"
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ghariton
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Post by ghariton »

Shakespeare wrote:Safer than MBT, which I did not double down.
I agree. I'm just teasing you a little.

FWIW, I think that Telus is in the strongest position to prosper and grow. On the other hand, I think that the price already more than reflects this.

BCE should chug along. I don't expect any great price movements one way or the other, and the yield should be safe. If rural lines are converted to an income trust, and the tax treatment holds, there should be a nice one-time gain.

MTS is a disaster waiting to happen. I don't think their dividend is sustainable.

But if you want a really nice little telecom investment, why not the Bell Nordiq income trust? Nice yield, little prospect of competition in their territory, and a fairly efficient operation.

All of this is my speculation, based on no inside knowledge whatsoever.

[Full disclosure: I don't own shares in any of these companies (except through an index fund), nor do I intend to.]

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Shakespeare
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Post by Shakespeare »

why not the Bell Nordiq income trust?
I've thought of it, but I'd want a bit better yield - approaching 8% for a trust.

With BCE, I think there's a good chance I can exit it with some capital appreciation - say, 15% - to boost the return. I don't think BNQ.UN has much chance of capital appreciation and may drop in price if interest rates rise.
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Post by Bylo Selhi »

Shakespeare wrote:
why not the Bell Nordiq income trust?
I've thought of it, but I'd want a bit better yield - approaching 8% for a trust.
IIRC you bought some T in 2002 at the secondary IPO price of $9.85 and then sold when the price hit ~$15. If you'd held, your shares would now be worth $44 and the yield on the purchase price would now be north of 8%.

(I'm still holding the shares I bought at the same time and couldn't resist the tease ;) For me, T has almost made up for my NT (Not Telus) misadventure.)
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Shakespeare
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Post by Shakespeare »

IIRC you bought some T in 2002 at the secondary IPO price of $9.85 and then sold when the price hit ~$15. If you'd held, your shares would now be worth $44 and the yield on the purchase price would now be north of 8%.
I know, I know. :cry: :cry: :cry: :cry:
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Post by ghariton »

Yes. I spent the 1990s learning the "buy and hold" strategy. I finally mastered it in the fall of 1999. :cry: :cry: :cry:

I also learned about "buying the dips" in 2000 and 2001. :cry: :cry: :cry:

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Post by hifidelity »

Was going to buy today, and now it's up 5% today. Damn (for me anyway). I can wait....

Is it odd if I prefer to buy on down days rather than up days?
Last edited by hifidelity on 23 Nov 2005 21:12, edited 1 time in total.
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Post by yielder »

All the telcos were up today. Somebody woke up today in a good mood about the industry. :lol:

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Post by bill2009 »

Somebody woke up today in a good mood about the industry
Or expecting a dividend tax break.
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Post by hifidelity »

bill2009 wrote:Or expecting a dividend tax break.
:)

Who tipped them off I wonder? Somebody inside DoF perhaps? Gotta love shady stuff like this.
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Post by yielder »

hifidelity wrote:
bill2009 wrote:Or expecting a dividend tax break.
:)

Who tipped them off I wonder? Somebody inside DoF perhaps? Gotta love shady stuff like this.
So with this tipoff, they only liked the telcos? Weird. WADR, what shady stuff? Some contrarian decided that the stocks were cheap. That often happens with dividend paying stocks. The dividend tends to provide a floor price. There are at least three in this thread alone who think that BCE is cheap.
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Post by ghariton »

Shakespeare wrote:With BCE, I think there's a good chance I can exit it with some capital appreciation - say, 15% - to boost the return. I don't think BNQ.UN has much chance of capital appreciation and may drop in price if interest rates rise.
Close enough. So far today, BCE is up by 6.63%. Of course, BNQ.UN is up 6.65%. :wink: :wink: :wink:

Georges
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