Rogers Communications (B) (RCI.B.TO)

He owns all the telcos. On this one timing makes sense in that it is undervalued in terms of its peers. They generate the largest percentage of their revenue from wireless, which is a space he likes. The demand that is lost on watching TV is moving towards watching on a wireless, doing more on a smart phone. All of that bodes well for wireless data charges increasing. Dividend yield of 4.38%.

(A Top Pick July 3/14. Up 1.85%.) When he adds up all the parts, he thinks it is worth $55 a share. This gives you dividend and dividend growth. They have sports, real estate, cell towers that could be spun out.

With possible rising interest rates, are you better off in a REIT or a telco like Rogers (RCI.B-T)? People have always claimed that REITs are going to go down if interest rates go up. That was certainly the experience we had in 2013 during the temper tantrum over the tapering of the Fed bond buying program. He has always contended that higher interest rates are at worst a 2 edged sword for REITs because they imply a higher inflation which means the ability to raise rents. Some of the REITs have dropped the amount of debt they are holding, so the impact of higher interest rates would not necessarily be so bad. Also, yields are less attractive when bond yields go up, but if you see the 5%-7% yields on REITs, bond yields are still less attractive. However, he feels telecoms are higher growth with a higher ability to raise their dividends and will probably do better in a higher interest rate environment.

Given the changes that are going on in telecommunications, this one is not on his radar screen. Valuation wise it doesn’t look out of line. They are trying to refocus their energy. There were some disappointments in the latest quarter, both from a financial side and a subscriber metric that took people by surprise. This is largely a cable company and is finding it hard to compete with Bell’s (BCE-T) new fibre optics product. We are seeing more and more TV watching and phones, etc. are going to Internet protocol environment. Thinks they have a great deal of work to do going forward. Also, wonders about the amount of CapX they’ll need to keep going in the long run.

Cable Companies. He avoided since ’08. Thinks IP TV will eat Rogers for lunch. He sold Shaw recently. Cable is exposed. They paid a lot for NHL hockey rights. He has BCE-T and T-T.

(Caller has a core position and things have not been working. He thinks it is cheap and is considering adding to it and when the stock goes back up, he would trim it out a little.) Nothing fundamentally wrong with this company and this would be a good strategy on this.

Nothing seems to be able to get the ball rolling on this. Valuation doesn’t make a lot of sense to him because earnings are growing and the subscriber base is growing. At 13X earnings, you are paying a lot more for BCE (BCE-T) and Telus (T-T). Have a lot of great assets inside the company that are not getting good value. Trading at 14 X forward earnings. 4.6% dividend yield.

It has a nice yield but it is trading in a range. He prefers T-T or SJR.B-T. He liked the hockey deal.

He would probably err on the side of caution for this. Telecommunication companies are trading at about 8X EBITDA, and that is pretty lofty. He could rationalize those valuations if we are in a continued low interest rate environment and the companies are generating good cash flows. In this space, this company probably faces some of the biggest headwinds, largely because of the concept of a 4^th carrier being brought into place. It probably stands to lose the most in that kind of a situation.

Having a tough time since they lost their monopoly on GSM. You are better off with T-T or BCE-T. They are maintaining their prices, but being undercut by others.

This has been rocking around quite a bit and hasn’t made a tremendous move similar to BCE (BCE-T) and Telus (T-T). He prefers those 2 names and their characteristics.

(A Top Pick May 7/14. Up 4.3%.) Doing what they said they would do. They were kind of lagging in their customer service side and are fixing that. Increasing their dividend. Still a good company.

Sees a dividend coming in February and the NAV worth somewhere between $55 and $60 a share. He can’t believe that the valuation of their wireless is worth less than Telus (T-T), and given that this company has cable assets, Shomi and their interest in Maple Leaf sports, along with the biggest cell tower network and real estate. Altogether calculates $55-$60 a share in value. Doesn’t think there will be explosive growth, but it is undervalued.

Currently doesn’t have much exposure in the telecom market. Both Telus (T-T) and Bell (BCE-T) from his point of view are better positioned right now. This company has been concentrating on reorienting their company to being customer focused and realigning their management areas. A lot of their delivery depends on coaxial cable, whereas Bell has forged ahead with a lot of fibre optic and can deliver greater capacity and higher quality picture. Doesn’t think the current business model is competitive.

In the telecom space, Telus (T-T) is actually doing the best of the 3 big players. This one is a mature business model, generating a lot of cash flow and very cognizant about buying back stock and increasing its dividend. This is a place for people to hide and get a decent yield. Despite her regulatory concerns, these companies kind of operate in an oligopoly within Canada, and are all doing relatively well in terms of cutting costs and getting cash flow.