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Posted On: 05/05/2017 2:12:40 PM
Post# of 2218
$FTR The Best Cheap Stocks to Buy for $10 or Less: Frontier Communications (FTR)
Stock Price: ~$2.00
Like A.H. Belo, Frontier Communications Corp (NASDAQ:FTR) has secular pressures on its business. For Frontier, it’s the legacy wireline and long distance businesses that are losing subscribers and revenue. Unlike AHC, however, Frontier is a highly leveraged and highly risky play.
Even with the huge amount of debt, though, the steady decline in FTR stock of late seems a bit too much. Frontier stock now trades at its lowest levels since at least the mid-1970s.
What started the decline likely were concerns about Frontier cutting its dividend. In fact, with the dividend now yielding 22%, a cut is all but certain. However, as Morgan Stanley (NYSE:MS) argued last month, a cut could probably help the stock at this point. It would free up cash to manage the balance sheet, and ease some of the selling pressure on the stock. Besides, may investors have already sold shares off in anticipation of cut, anyway.
Again, Frontier is a high-risk play, and certainly not for dividend growth investors. But there is still value in the business — including broadband and video subscribers — while the stock is being priced for bankruptcy.
FTR is a falling knife, but if the stock can stabilize, it could rebound in a hurry.
Stock Price: ~$2.00
Like A.H. Belo, Frontier Communications Corp (NASDAQ:FTR) has secular pressures on its business. For Frontier, it’s the legacy wireline and long distance businesses that are losing subscribers and revenue. Unlike AHC, however, Frontier is a highly leveraged and highly risky play.
Even with the huge amount of debt, though, the steady decline in FTR stock of late seems a bit too much. Frontier stock now trades at its lowest levels since at least the mid-1970s.
What started the decline likely were concerns about Frontier cutting its dividend. In fact, with the dividend now yielding 22%, a cut is all but certain. However, as Morgan Stanley (NYSE:MS) argued last month, a cut could probably help the stock at this point. It would free up cash to manage the balance sheet, and ease some of the selling pressure on the stock. Besides, may investors have already sold shares off in anticipation of cut, anyway.
Again, Frontier is a high-risk play, and certainly not for dividend growth investors. But there is still value in the business — including broadband and video subscribers — while the stock is being priced for bankruptcy.
FTR is a falling knife, but if the stock can stabilize, it could rebound in a hurry.
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