Sunday, February 15, 2015

CenturyLink: Ominous Signs


Summary

  • CenturyLink reported Q414 results that continued some negative trends.
  • The telecom giant continues to produce substantial free cash flow despite a lack of growth.
  • The stock has downside protection with a 5.5 dividend yield and a large approved stock buyback plan.
The recent quarterly results of CenturyLink (NYSE:CTL) are starting to show some cracks in the previously stable operations that offered investors high yields. The telecom giant is still struggling with the shift from legacy access lines to modern services like high-speed Internet and pay-TV services. Combined with a large stock buyback and the hope of a REIT spinoff, the stock soared above $44 during the summer. Now, however, the results are starting to lag and the buyback spending is slowing. The latter is not a good sign for a highly rewarding spinoff that would make the current stock price around $40 attractive.

Read the full article at Seeking Alpha.


Disclosure: Long CTL. Please review the disclaimer page for more details. 



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