BCE Inc. (BCE.TO)

All telcos really sold off through the spring and summer, both in the US and Canada. Believes that we have seen the lion’s share of the initial move higher in the 10 and 20 year bond rates and that is likely to neutralize over the next little while. Interest sensitives in general will do better over the next little while. He still prefers to own something that gets a little bit of a lift from a better economy, like financials, but for those looking for yield, this is pretty attractive. He would prefer Telus (T-T), which has a little bit better internal growth and will buy back shares and give you dividend increases of 10% a year for the next 3 years.

(A Top Pick May 25/12. Up 17.2%.) When he recommended this, he felt that interest rates were going to stay low and that people who were into GICs would be moving over. Doesn’t find this attractive anymore.

Good entry point. The sector has been under pressure. Great blue chip company and not overvalued. Prefers T-T

(Market Call Minute.) The dreaded Verizon (VZ-N) isn’t coming, so the telcos are all going up again.

Bell Canada (BCE-T), Telus (T-T) or Rogers (RCI.B-T)? Verizon (VZ-N) possible incursion into Canada is causing a negative effect on all the telcos. The ones most exposed to this would be Telus and Rogers because of the wireless exposure. These will probably be dead money for a while. If you own, you could even think of selling half of your position. Dividend yields are going to be safe.

One of his largest holdings. It has been tough. What is the probability that Verizon comes. He is at 50% and it could changes in September at the auction. BCE has less impact on Verizon than Rogers would have. Dividend is safe.

With the possible entry of Verizon (VZ-N), which of our big 3 telcos will suffer the least? His feeling is that Bell Canada (BCE-T) will be the least affected as they have the least exposure to wireless clients. Feels Rogers (RCI.B-T) would suffer the most. Cdn cell phone prices have been coming down and he doesn’t think Verizon would come in with a plan that was half the price of Cdn plans that would totally kill margins. Expects if they do come in, it will be pretty orderly.

Was an overcrowded trade. We had our growth channel and then when we violated the trend line we had a correction. From here he does not expect a lot. No harm owning it, respectable yield. 5.5%

The cable names are something he would be a HOLD on. Were phenomenal. There are the issues of the new entrant and it is a defensive stock. You want cyclicals. Hold or sell.

He can understand the government’s situation regarding Verizon (VZ-N). We are all looking for cheaper rates but, knowing Verizon, we are not going to get cheaper rates. Thinks it is unfortunate that they are allowed to come into Canada and jump on our networks. In this one, the dividend is really secure and he would be a buyer.

Prefers to T-T and RCI.B-T. He is taking advantage of the pullback. Has been a great stock over the years. Quick to increase dividend. Likes how they market themselves and that they are into the sports area. Take advantage of market stupidity and you will do well. Verizon is overdone. Even if it does come, it has been over discounted by a factor of 4 or 5. Verizon won’t come in to lose money.

Weakness in May/June from interest rate fears. Then there was the threat of Verizon and we will see if that happens. He went to a near zero weight in favour of other sectors.

Feels the valuation on this company is still quite attractive and he is buying for his clients. Thinks there are some options for a number of these companies. Now that it has acquired Astral there is potential for them to unlock shareholder value by spinning out the media division.

The “potential” arrival of Verizon (VZ-N) is disruptive. If they actually do come, which could be in a variety of different ways, it will definitely be disruptive in the short run. History has shown in other countries that a 4^th player is generally not successful in the long run. Because of this company’s extensive broadcasting assets and because it has the smallest percentage of its assets in wireless, it will be the least affected.

There are very few sectors that are not overbought. Telecom is one of them. This is a dominant player. Verizon is just forcing them to be more competitive. He is not worried about it. Seasonality begins in October. Buy it now and ride it through. Seasonality is only one input.