Out Fox The $treet

Frontier Communications completed a reverse split on Monday. The stock has been absolutely beat up due to this move and a dividend cut. The market needs to focus back on cash flows. Back in May,  my thought  was that  Frontier Communications  ( FTR ) was attractively priced below $1.50. My major concern in owning the telecom stock was a lingering shakeout from the dividend cut and reverse split that has the stock hitting new lows now. Read the full article on Seeking Alpha.  Disclosure: Long CTL. Please review the disclaimer page for more details. 

Windstream reported mixed Q4 results, but the stock rallied as cash flows continue to cover the large dividend. The telecom provider made several capital return moves suggestive of an oversold stock. Ultimately, the stock offers a limited margin of safety with the current balance sheet. In my  last article , I highlighted how Windstream Holdings (NASDAQ: WIN ) offered a large dividend backed up by solid free cash flow. The biggest concern with buying the stock was whether the market could handle the mounting losses reported by the telecom provider.  Read the full article on Seeking Alpha.  Disclosure: No positions mentioned. Please read the disclaimer page for more details.

The provider of local data and voice services might have limited growth prospects, but CenturyLink ( NYSE: CTL     ) continues to innovate to maintain high levels of free cash flow, or FCF. The stock has recently surged following strong earnings and vindication that the large stock-buyback plan is paying off. The company is shifting from legacy voice services to strategic products of high-speed Internet, Prism TV, and managed hosting services. The move isn't as much geared toward reinvigorating growth as stabilizing earnings and FCF potential. The other similar local telecom providers of Frontier Communications ( NASDAQ: FTR     ) and Windstream Holdings ( NASDAQ: WIN     ) sit in a similar situation, attempting to trade legacy revenue for new strategic products to maintain cash flow. Are investors starting to warm up to the sustainability of this model? Read the full article here . Disclosure: Long CTL. Please read disclaimer page f...

Summary Investors should focus on the solid free cash flow. 12% dividend is abnormally high due to investor fear. Company should consider a more flexible capital allocation strategy. The typical investor interest in Windstream ( WIN ) centers on whether the company can continue paying out a $1 annual dividend that equals a 12% yield. The bizarre focus on what the company pays out to shareholders has investors looking in the wrong direction. Windstream is a provider of advanced network communications to businesses and consumers primarily in suburban and rural areas. The company continues to transition from legacy voice consumer services to more advanced cloud computing, managed services, broadband, and digital TV services. Read the full article at Seeking Alpha. Disclosure: Long CTL. Please review the disclaimer page for more details. 

One difficult part of investing requires that investors not follow the herd. In the case of CenturyLink ( CTL ) , the company continues to produce solid free cash flow as the market harps on revenue growth and legacy business lines. The stock now trades back around 52-week lows even while providing a net payout yield of around 12% and growing. The company is the third largest telecommunications provider in the U.S. It provides data, voice and managed services in local, national and select international markets. The stock market though focuses squarely on its legacy local voice business and misses the transition to data services including fiber to wireless towers and growing television service. Read the full article at Seeking Alpha. Disclosure: Long CTL. Please read the full disclaimer page for more details.

Back on the Q113 earnings report , CenturyLink, Inc. ( CTL ) defied the critics by announcing that the company had already repurchased $682 million worth of stock through May 7, 2013. Remember the company had slashed the dividend back in February, in order to better allocate cash and implement a more flexible stock buyback plan (see Did CenturyLink Just Become A Gold Mine To New Investors? ) Critics at the time suggested that the company would never actually repurchase shares. The mega-cap stock plunged 26% that day, but it has since rebounded to nearly $38 from the lows below $32. The third-largest telecommunications provider in the U.S. has already provided savvy investors with a nearly 20% gain from those first-day lows not even counting dividends. Read the full article at Seeking Alpha. Disclosure: Long CTL. Please review the disclaimer page for more details. 

Though Nuance Communications, Inc. (NUAN) remains valued relatively cheap; investors continue to complain that the company is a serial buyer of other technologies instead of building on the existing strong product base. According to TechCrunch, the company has struck again with the purchase of virtual assistant specialist VirtuOz; a company that recently made news with a sizeable deal with Windstream Corporation (WIN) . Nuance is a leading provider of voice and language solutions for businesses and consumers around the world. Its technologies, applications, and services make the user experience more compelling by transforming the way people interact with devices and systems. Besides this potential purchase, the company announced several interesting deals at CES suggesting the future remains bright and the owner of the android mobile operating system isn't the threat that most fear. Read the full article at Seeking Alpha. Disclosure: No positions mentioned. Please review the ...

When Windstream (WIN) reported earnings last week, investors took the stock down to 52-week lows over concerns the company wouldn't have the ability to pay the dividend going forward. The local telecommunications provider missed earnings yet again, but more disappointing is that capital expenditures continue to creep higher. In order to maintain that juicy 12% dividend, the company must produce enough free cash flow to cover the cash distribution. Lately that equation has come into question even with an increasing revenue base as capital expenditures have soared. Read the full article at Seeking Alpha. Disclosure: No positions mentioned. Please review the disclaimer page for more details. 

With investors hungry for yield, should they jump into the very high 9.0% yield on Frontier Communications (FTR) ? The answer might surprise you, considering the past of this long-suffering sector. Having been an analyst in the telecommunications industry for 15 years, industry names such as Frontier, that focused on the wireline business, don't conjure up much excitement. Most wrote off those companies for the trash heap years ago. A surprising thing happened on the way to total annihilation: the companies have been able to maintain a considerable amount of the wireline base while also dramatically reducing costs. Read the full article at Seeking Alpha. Disclosure: No positions mentioned. Please review the disclaimer page for more details.