Bob StodgellRogers Communications (B)RCI.B.TOBUYMay 20, 2008

Likes it the best in the group because it's crystallized its sports assets.

It's outperformed BCE and Telus which she owns for the dividend (Telus has the most turnaround potential). The street expects Rogers to spin off their sports division. You can't go wrong with any telcos, which aren't getting any love now. They are undercutting each other are prices. She likes it for defence and yields, though is not high-growth

Trying to monetize sports division, but a ways to go. Falling behind on network quality and investments such as Shaw acquisition. Unfocused. Personal note:  He changed his cell to Rogers, can't believe how bad it is.

Growth has sold off and the market is running to income names. In Canada, income names he likes are Rogers and Brookfield Infrastructure.

He doesn't own telecom. It looks a little better than Telus and is more diversified. Also the payout ratio is much less at 20%. He sees some but not a lot of earnings growth.

Pricing pressure in the sector. Doesn't see appetite for another big telecom merger anytime soon. 

In the sector, he'd probably look at BCE or RCI.B.

A lot of these companies have high debt levels. It has had a full recovery from the bottom of its breakdown to $34 which is a big drop for such a big company. Above a $55 consolidation range indicates a positive signal.

Doesn't rank super-well in his universe (in bottom 1/3 out of 1000 Canadian companies), and has a lot to do with earnings acceleration profile. Move off the bottom probably due to value seekers, dividend, and sports plans. Wireless side is challenged.

A purely dividend investor could hold.

(Note the shortish timeframe.)  Telcos are still in the penalty box. Price war has effectively slowed down. Infrastructure assets are underappreciated. Slower immigration has been a drag. Still likes the sector. 

Regulatory changes on immigration have impacted the entire sector, and competitive pricing has weighed it down.

His choice in the telco space. Opportunities to monetize MLSE. Among peers, its balance sheet is the most compelling going forward.

All the telcos are debt-laden, and they have to pay interest on that. Unable to get pricing power from the 5G movement. Now we're coming up on 6G, so they're going to be spending more. But revenues aren't rising. This name hasn't raised dividend in 10 years, as it's had to allocate a lot of capex out of free cashflow.

Not something he wants to get involved in. He does, however, own CCA in client TFSAs.

This year, money has rotated from telcos to cable companies like this one. Inferior network, both wireless and wired. Telcos' capex winding down, cable companies now need to spend to upgrade. Fairly valued today, telecoms are much cheaper and probably due for some sort of mean reversion. Be cautious, but if you already own there's no reason to part with it.

Sports team has added value, but still has to buy out (using debt) the remaining minority stake. Then what? Family may want to still retain control. May not be as big a monetization as people are hoping -- an uncertain catalyst.