Vodafone Group PLC (VOD)

Had owned this in the last cycle, and sold his holdings into the Verizon news. He likes parts of this, but is concerned about other parts. Has a lot of new subscriber growth potential. Doesn’t like the European situation and the lack of growth in that part of their business.

Sold his holdings on the announcement of the Verizon deal. A leader in its space. Put a Stop under this one, and let the market save you. Has been punished a little bit in the short term, but thinks it will come back.

He is light on telecom as growth has been good over the last couple of years. Prefers VOD to Verizon shares. VOD is fine here. Penetration is slowing on the smart phone market. You will get your yield.

(Market Call Minute.) 70% of its subscribers are in emerging markets. It has had the cash and Verizon shares spin out. Still likes it. Has now become a growth stock again because emerging markets are a much bigger percentage than the slow growth developed markets.

Made some money in emerging markets, but got clobbered in Europe. The challenge for the executives who got all that cash from the Verizon deal, is how are they going to manage the capital along with the balance sheet at the same time deal with competition. In Europe, everybody is undercutting everybody else just to get money in the door. Not a big fan of this company at this time. It could go sideways for quite a while.

You have to be very careful on this one. They sold their Verizon wireless stake last year and paid a dividend. The stocks have now fallen back. Ultimately they are going to go around the world looking for opportunities to invest. Very good balance sheet. Good safe company.

Sold his Verizon stock. VOD is starting to buy other assets in Europe where they are cheaper. Still likes it.

Equal weight on AT&T (T-N), Verizon (VZ-N) and Vodafone (VOD-Q) as a dividend play? If looking for dividend income, why not take advantage of the dividend tax credit that is offered on Canadian dividends? Although you get a dividend on these, from a tax standpoint it is treated as interest. As far as the telcos in the US are concerned, is that they distribute a lot of cash which generally run at the 4%-5% rate. AT&T is a slower grower. Of these 3, his favourite would probably be Verizon.

A great buy at these levels. They can certainly afford to pay out and increase their dividend. They made some good acquisitions on the cable side. They don’t give you a clear vision of what they want to do. But if, say, AT&T wanted to expand globally, there is no other asset they could own than VOD. The stock is not expensive at these levels and pays a nice dividend.

Bought because it owned 44% of Verizon. Late last year they announced the sale of the asset. You received VOD shares as well as cash. You have made substantial money since then. He continues to own it and it is a good story. He likes their operations in India and Africa, growing very nicely.

Extremely solid management. He did own up to the split and the selloff of its Verizon Wireless, but subsequently sold because right now a lot of the value is locked up in the potential for them to Sell or to be acquired by AT&T (T-N). He is not completely convinced that that is going to happen. Their major market, which is Europe, is struggling. A very strong player and a very strong competitor and thinks they will succeed, but doesn’t expect a lot of growth for them in those major markets. However, you still get a tremendous dividend yield (4%) so if you are interested in yield, this is a pretty good investment.

We are in a very interesting market because over the last 14 months the correlation, the degree to which shares are all behaving the same, has been coming down. There are “haves” and “have-nots”. He would say that the telecom sector is probably not the first one to focus in. People have been moving exposure to things that are slightly more economically sensitive and where you might get some benefit if the economic data picks up, like it is. Telecom would not be his favourite space.

(A Top Pick March 15/13. Up 31.62%.) Had a 6 for 11 stock split. Second-largest phone company in the world, with operations mostly in Europe and developing markets, but its major assets that he liked was the 45% ownership of Verizon Wireless (VZ-N). He had reasoned that at some point, Verizon would either buy that asset from them or sell it. Verizon bought it with cash and shares. Vodafone then took the Verizon shares and sent them directly back out to shareholders and paid out a special dividend. Also kept some cash as a war chest to make acquisitions. Just announced an acquisition of a big cable provider in Spain so that they will be able to offer bundled packages.

VOD-O sold VZ-N. It’s a high quality problem – people now have to pay tax on the gain. Don’t sell either stock yet. Thinks he will end up holding on after the deal completes.

He would tend to be a seller of this. Nothing wrong with the company, but you’ve got the deadlines coming up where the transition is going to take place in their business and then they’ll be flush with cash and what are they going to do with it. Thinks you can get this back in the $33-$34 range.