Saturday, June 27, 2009
Brazil Telecom Participacoes S/A (BRP) EPS Reported Estimated $8.05 per shared Healthy Dividend is in Order
BRP is moving increasingly into mobile communications and this is where its "growth edge" should come from. It appears to be undervalued relative to its growth prospects and has an excellent balance sheet. Some financials: PEG is less than 0.5, PE ratio about 1/2 of that for industry, yet 5 yr. est. growth at 30%+ !. Gross profit margin 37% and lots of free cash. Brazil headed for upgrade to investment status in next year. Given low growth rates at home, I think this overseas investment will be a winner. Big run up but hitting new highs and should go higher.
Currently has more cash $21.82 on the books than microsoft, current book value $40.57 trading at 0.96 times book. Carrying a P/E of 6.19 and a forward P/E of 4.85. Not a lot of debt for a telecommunication company.
Disclosure I am long BRP in my utilities folio.
Back on May 13, the board just declared its 250th consecutive quarter.
Quoting Chairman, President and CEO Bill Johnson.
"Our company has a strong foundation and a bright future," Johnson said. "We have a clear strategic focus on the electric utility industry and we have two strong utilities."
"We have a relentless daily focus on excelling in the fundamentals of our business," Johnson said. "Our employees are collaborating well to control costs and find efficiency improvements. We've had very good success in delivering on our financial commitments, and we're making smart investments in our future."
"Sustainable dividend growth is a financial hallmark of our company, and a reputation we intend to build on,"
"These are challenging times for our economy," Johnson said. "Our nation and industry face some big decisions on energy. But our company has a balanced, flexible plan to prepare us and our customers for a new energy future. I am confident we are on the right track."
The company's two utilities - Progress Energy Carolinas and Progress Energy Florida - provide retail electric service to 3.1 million customers in North Carolina, South Carolina and Florida.
Disclosure I am long PGN shares in my Utlities Folio
Dolan, 54, has 32 years of experience in the energy industry and has been with Progress Energy and predecessor Florida Power Corp. since 1986 in positions of increasing responsibility. His career includes extensive operations, strategy development, customer service, regulatory affairs and business management experience. He has served most recently as vice president of External Relations for Progress Energy Florida.
"An important component to the success of our utilities will involve the continued development of customer and key leader relationships that support a constructive business climate," said William Johnson, chairman, president and CEO for Progress Energy. "In addition to his outstanding and recognized leadership within the company, Vincent brings a unique mix of experience to his new role. I am confident in his ability to lead Progress Energy Florida during this era of potentially transformational change in the energy industry."
"I'm excited about this opportunity to lead our dedicated employees as we continue to meet the needs and expectations of our customers and communities," Dolan said. "There are many changes under way in the energy industry, but two constants are the expectations our customers and regulators have for us - and the high standards we have for ourselves. We know more than 1.6 million families and businesses depend on us to keep electric service safe, reliable, affordable and environmentally sound. And we're committed to meeting and exceeding their expectations every day."
Lyash, Progress Energy Florida's president and CEO since 2006, has been named executive vice president for Corporate Development for Progress Energy. In his new role, Lyash, 47, will be responsible for numerous elements of the company's balanced solution strategy, including its efforts to expand energy efficiency, renewable energy resources and state-of-the-art power plants. He will relocate from St. Petersburg to North Carolina, but will oversee the company's strategic resource efforts - developing technology, programs and infrastructure to advance the balanced solution strategy - in the Carolinas and Florida.
"I am extremely proud of what our employees accomplish 24 hours a day, seven days a week - dependably, efficiently and without fanfare - in ensuring that when our customers flip the switch, the lights come on," Lyash said. "As we look to the future of our state and region, we know that ensuring a high level of reliability and service for the future means pursuing innovative and cost-effective energy technologies, expanding our industry-leading efficiency programs and ensuring a state-of-the-art electric system that our customers can continue to depend on. We are actively pursuing all three elements while maintaining a daily focus on operational excellence."
The new assignments are effective July 6.
Progress Energy (NYSE: PGN - News), headquartered in Raleigh, N.C., is a Fortune 500 energy company with more than 21,000 megawatts of generation capacity and $9 billion in annual revenues. Progress Energy includes two major electric utilities that serve approximately 3.1 million customers in the Carolinas and Florida. The company has earned the Edison Electric Institute's Edison Award, the industry's highest honor, in recognition of its operational excellence, and was the first utility to receive the prestigious J.D. Power and Associates Founder's Award for customer service. The company is pursuing a balanced strategy for a secure energy future, which includes aggressive energy-efficiency programs, investments in renewable energy technologies and a state-of-the-art electricity system. Progress Energy celebrated a century of service in 2008. Visit the company's Web site at www.progress-energy.com.
Disclosure I am long PGN shares in my Utlities Folio
The FCC action announced Thursday was the last needed regulatory approval.
CenturyTel, the Monroe-based telecommunications provider, said earlier that the company's new name will be CenturyLink. The company's stock will continue to trade under the symbol CTL.
CenturyTel announced last year it was buying Overland Park, Kan.-based Embarq, the nation's fourth-largest traditional telephone company. Analysts said it was a harbinger of further deals for rural phone companies, which are suffering from line losses as consumers choose phone service from wireless or cable companies.
The deal earlier was approved by all 33 states in which the two companies operate.
Apart from providing service in rural areas and smaller cities in 18 states from coast to coast, Embarq is also the main phone company in Las Vegas. CenturyTel's service areas are mainly in the South and Midwest, in a swath from Louisiana to Minnesota. It also provides service in Colorado and the Northwest. Combined, the companies will have 8 million telephone lines, 2 million broadband customers and about 400,000 video subscribers.
While the company will be based at CenturyTel's headquarters, Embarq shareholders will own two-thirds of the business. They are set to receive 1.37 CenturyTel shares for each share of Embarq stock they own.
Based on CenturyTel's Wednesday close of $31.51, that's equivalent to $43.17 worth of CenturyTel stock for each Embarq share owned.
CenturyTel shares closed up 65 cents at $32.16 in trading Thursday while Embarq shares finished up $1.06 to $44.08.
CenturyTel Chief Executive Glen Post will hold the same position in the new company, with Tom Gerke, Embarq's CEO, as executive vice chairman.
Disclosure I am long Both CTL and EQ shares.
Monday, June 22, 2009
The dividend is payable September 10, 2009, to shareholders of record at the close of business on August 15, 2009.
Lilly, a leading innovation-driven corporation, is developing a growing portfolio of pharmaceutical products by applying the latest research from its own worldwide laboratories and from collaborations with eminent scientific organizations. Headquartered in Indianapolis, Ind., Lilly provides answers - through medicines and information - for some of the world's most urgent medical needs. Additional information about Lilly is available at www.lilly.com.
Disclosure I am Long LLY shares in my Healthcare Folio.
AGNC is a REIT formed in 2008 to invest exclusively in agency pass-through securities and collateralized mortgage obligations for which the principal and interest payments are guaranteed by a U.S. Government agency or a U.S. Government-sponsored entity. The Company is externally managed and advised by an affiliate of American Capital, Ltd. For further information, please refer to www.AGNC.com.
Disclosure I am long AGNC shares in my Reit Folio
As one of the nations leading producers of bakery goods, Flowers Foods (FLO -Investor Details) operates popular brands such as Nature's Own, Cobblestone Mill, Blue Bird and Bunny. In addition, Flowers is a leading consolidator in a defensive industry, and as such it offers investors a combination of revenue safety and growing profitability -- attractive qualities in tough economic times.
Founded in 1919 by the Flowers brothers in Thomasville, Georgia, the company went public in 1968 and was listed on the NYSE in 1982. The current entity came into being in 2001 when Flowers Industries sold its Keebler investment to Kellogg (K) and spun the remaining divisions into a new company.
The company has strong cash flow, a nice dividend and an active stock buyback program -- Flowers repurchased 1.5 million shares of its own stock in the third quarter for $38 million dollars. Investors should also note some recent insider buying at the $23.00-$24.50 range.
In May,Flowers Foods boosts regular quarterly dividend by 17 percent to 17.5 cents. The company is also rich in real estate holdings. Including its home offices, it owns all but one of the 39 production facilities it operates throughout the US.
The stock’s recent correction allows new buyers the opportunity to take a position without chasing the shares. In addition, the company’s gross profit margin should begin to improve as lower input costs and efficiencies of scale start to take hold. The fact that consumers are eating more often at home bodes well for the company’s bread sales. Analysts are forecasting 12% earnings growth in 2010, which probably is too conservative, as a 15-16% rate of improvement is more like it. Its risk reward ratio is a favorable 2:1-translation: a buyer is essentially risking $1 to make $2 (the stock’s upside potential is about $6 while its downside risk nears $3 at this juncture) and that type of opportunity does not show up too often.
Disclosure I am long FLO in my consumer goods folio.