Shaw Communication (B) (SJR.B.TO)

(Market Call Minute.) Trading at about 18X PE with about a 5% dividend. Nothing specifically wrong with this but he would rather be in Rogers (RCI.B-T) or BCE (BCE-T).

He owns all the telcos, because they all have good yields and reasonable dividend growth potential. This company is in a transition period where they bought Wind and sold their media. They could potentially spend $2 billion in the next couple of years on the Wind expansion, which could put a lid on their dividend growth over the next couple of years. Dividend yield of 4.8%.

Has not been enamored with this company. Family connections seem to be too strong. They are operating in a relatively limited market. If you are going to go into this sector, go into something like BCE (BCE-T).

Flat revenues. They made a sale to Chorus and raised some cash. It is almost a no growth business. The wireless business will prove tough for them.

(Market Call Minute.) Longer-term this is a Buy because of their Wind Mobile acquisition, but shorter term it will probably just trade back and forth as they exchange customers.

(Market Call Minute.) There has been a change here with the acquisition, so it looks a little better than it did, but not cheap.

Recently acquired Wind Mobile. Reported disappointing earnings recently, but its really the wireless. Sold their media assets to fund the acquisition, which will make a more forceful play into wireless. There are other areas that she is looking at for yield.

Likes how they sold their media asset, and are now focusing on wireless. This is going to take a lot of money, but it is money they have available. Feels they are going to cover their dividend and are not going to have to raise capital. The dividend they are getting from Corus (CJR.B-T) is going to be paid as a DRIP program, giving them stock rather than cash. This gives them the option to do something if they need to down the road. CapX is going to be heavy in the next couple of years, but it is going to pay off a much higher growth profile than Telus (T-T), Bell (BCE-T) or Rogers (RCI.B-T). They are reporting this week, so wait to see what happens in case there is some updated guidance.

(A Top Pick Jan 30/15. Down 9.77%.) Thought the government was going to erect a 4^th wireless carrier. If that had happened, money would have flowed out of the big 3 and into names like this. They are buying Wind and shedding their slower growth media assets. These moves will be a good catalyst for growth and it pays a nice 4.6% dividend.

Thinks the telco sector in Canada is fairly valued. Valuations on a relative and historical basis are high, however they provide stable and predictable earnings. He has some concerns with what is happening in Western Canada with Shaw and Telus (T-T) given Shaw’s intention to expand its wireless network. It is going to be a very competitive environment and expects there will be potential pressure on pricing. Prefers BCE (BCE-T) or Rogers (RCI.B-T) whose valuations are a little more compelling with less dynamic pressures.

SJR.B-T vs. CJR.B-T. He wants to buy a good company when it is relatively cheap. Technically there is some relative value to both.

Wind is a good catalyst for Shaw. 5% yield. Shaw has the most cable subscribers in Canada.

His view was that it was a logical takeover candidate, but by purchasing Wind Mobile it became a little harder to digest. A little negative on the whole Canadian telco and cable sector because downward rate pressure is coming in a variety of forms. Prefers Verizon (VZ-N) as the US has very low, very competitive pricing on almost everything.

Has trouble owning companies that have anything with a “dot B” in the symbol, a non-voting stock. The company hasn’t created a lot of value for shareholders in probably 10 years. They are shuffling things around between other company holdings that they control.

Acquiring Wind Mobile is probably a good move for them. It makes them a little more competitive in what they can offer. Paid a healthy price, but between that and the new TV offering announced at the CES show, it is going to help stem some of the losses they have seen on the other side. He doesn’t own this because he questions the positioning of most of these firms that are in the telecom area. Cell phones are becoming more of a commodity. On television and Internet, consumers are getting a lot more choices these days, so there is going to be more and more competition coming in. That could eat away at the margins for a number of the companies.