Orange SA (ORAN)

(A Top Pick June 28/13. Up 79.49%.) (Was France Telecom (FTE-N).) Target price is better than $27 so it has a lot of upside. For the 1^st time in many, many quarters, they actually gained subscribers. Cut their dividend. This is a huge player, not only in France, but in many other countries.

(BNN has dates shown as April 1/14. April Fools’ joke? I’m taking their word for it because I can’t match anything!!! Bill.)

(A Top Pick April 1/14. Up 52.2%.) Liked this because of their dividend of .8% euro and management said they were going to hold onto it until the end of 2014. Have since cut the dividend to .6% euro. Usually when this kind of thing happens, the stock goes down, but in this case it went up. His target price is $27 plus.

(A Top Pick Feb 20/13. Up 33.72%.) (Was France Telecom (FTE-N) when he chose it. Acquired by Orange.) Company is profitable for the most part and is a leader in its field. Not just in France, but in Africa, Spain and Poland. He could see an upside of $27. Still a Buy.

French telecom. Cheap stock but another has entered the market as a disruptive competitor, driving down pricing. Not a lot of sales growth and you have to grow through rising prices or cost cutting. It is hard for them to cut costs because 20% of shares owned by French Government.

Biggest telecom player in France with operations in Spain and Africa. Pays a huge dividend and have said they want to keep the dividend going through 2014. His target price is $27. He is happy holding this and just hopes they keep on paying the dividend.

Has been a disaster for the last few years. Some dividend cuts, declining revenues and declining earnings. They have many issues, competition being but one. Cost structure is too high. Further deterioration is the probability for this company.

Doesn’t like this one too much. Cut their dividend massively. There was too much debt and the dividend was unsustainable.

Pays a nice yield but one of the issues they are facing is that there is a lot of capital expenditure, which they can certainly afford, but there are a lot of telcos in Europe which should be allowed to merge but the European community is just not letting it happen. This is what is needed before the stocks can go much higher.

This was the wireless arm of France Telecom. He has a target price of $27.34. If it takes 10 years to get there, it is still a huge, huge gain. Management has said they want to maintain the dividend at €0.8 through 2014. This is the biggest player in France and they are also in Spain and Poland and growing in Africa. Some of the negatives include having too much goodwill and too many intangibles on the balance sheet.

Liked that they were paying a dividend of 0.8 Euros which they said they were going to keep doing through 2014. Tremendous upside. Can see this getting over $30 but there are some negatives. They have a lot of goodwill and intangibles, which could be written off at some point. CEO has been accused of fraud because of past government involvements. French marketplace has become far more competitive but they also operate in Poland and Spain, and getting bigger and bigger in Africa.

There are 2 major caveats on this. 1.) CEO is being checked for fraud but is being backed by the board. 2.) Current dividend is about 15% and they have indicated they want to continue paying this out through 2014. If they cut the distribution, that could be a major danger. Leader in the French market and they are growing in Africa.

Have avoided this because he has some concern about the sustainability of the 5.2% dividend. France has been undergoing some turmoil. A new mobile was crushing the whole market dynamic and this company has been hurt severely.

Bought this after they cut the dividend twice. Doesn’t think they will cut it further but it could be. Payout is better than 10%. Just reported results where they are making money but earnings went way down. The leader in France but are also in Spain, Poland and Africa. Cash flow for the upcoming year will be €7 billion.

On a 3 year chart you can see the trend is down. It may consolidate at $10 here. If it breaks that then it could be in danger.

While adding Deutsche Telecom (DTE-FSE) to his portfolio, he took a long hard look at this. Both carried fat dividends and one of the triggers for him was the possibility of another dividend cut from their current 9% dividend. The franchise is being challenged because Europe has fiscal austerity being introduced and no country more than France is having the big socialist style of increasing taxes.