Vodafone Group PLC (VOD)

(Top Pick Mar 19/13, Up 35.56%) Once you split off Verizon you have a pure play on Europe. In the US it is Verizon and AT&T. AT&T has to grow outside of the US if they want to grow. VOD would be an obvious candidate. It will take six months to clean up this separation before anything could happen anyway. VOD will not be that big after the spin out.

The big catalyst on this is obviously the sale of the Verizon wireless assets, which will ultimately lead to a one-time special dividend for their shareholders. This will come as one part cash and one part shares. When this becomes available, shares will be available to sell and take a capital gain. Post the dividend, the company will fall back to a smaller position and the dividend may even be recalibrated to a lower level, but the company will put the capital to work in other markets. Longer-term, this is a good story.

A diversified telco that operates throughout Europe and Asia. Would not be his favourite in the global telco space. Too much exposure to too many markets that are challenged by either growth or a regulatory standpoint. Yesterday AT&T filed a submission with UK regulators saying that they did not expect to make a bid for this company within the next 6 months. He had been skeptical that AT&T would be interested in buying them. (See Top Picks.)

Sold his stock after the announcement of the Verizon deal. He owned it for the yield and when the deal happened, that was his exit strategy. If you have done well with it, you ask if it is worth hanging on for the extra dividend.

Selling off their wireless division to Verizon makes a lot of sense. The issue now is what are they going to do with the money and how do they expand their businesses. This is now primarily a European wireless company with assets in parts of Asia and Africa. He questions about how they spend their wealth and do they get acquired. Expects there is upside in this.

Caller asked for a recommendation for European Telecom. VOD is his favourite and he may own it any time now.

Vodafone (VOD-Q) or AT&T (T-N)? He would go with AT&T. His favourite telecom is probably Verizon (VZ-N) which is a little growthier and has a decent dividend with a bigger wireless footprint. AT&T is a good income stock. Got a little pricey but has come back.

Continues to own it. Second biggest mobile phone company in the world. Prime jewel is the 49% ownership of Verizon, which they are selling. He will decide whether to keep either or both after the deal is done. VOD has a semi-annual dividend. There is a big cash and share dividend that will happen when it closes in May and you get paid in June. No one knows what Verizon will be worth at the time.

Sold his holdings after they announced the deal. If you want to treat this is a yield stock, you can. Basically, you need to have a premise on it. If your premise is “I want a good yield stock” you can stick with this. Difficulty is that we really don’t know what the plan is going forward. He would be inclined to hold it for yield but if you are looking for growth, lighten up on your holdings.

Likes it. The growth profile is not as good now. Tough regulatory environment in Europe. Despite the run, the stock is not expensive. 12 times earnings. Yield is well covered even if a high payout ratio. It is safe. Would not be favourable if AT&T wanted to buy them out. Talks of Tapering could cause a drop early next year.

This is primarily now a European mobile telecom player with assets in other parts of the world, as well as the emerging markets of India, Africa and Asia. Thinks there is a chance you will see AT&T (T-N) take over this company down the road.

Verizon (VZ-N) is going to take out the 44% stake of wireless. The way this was constructed is that it is going to be virtually a tax-free exchange.

Just sold his when they announced the deal. But it has done well since then. You have to know what is act two in the play. He thinks you will get something, perhaps a special dividend. He left for a better opportunity but there is nothing negative on the horizon. Great yield and lots of cash on the balance sheet.

Getting maybe near the tail end of the performance. He holds on because of the CFO, who is a real visionary.

(Top Pick Sep 24/12, Up 31.88%) Likes it because of Verizon Wireless. Verizon will be buying VOD later this year and shareholders will get cash and shares. He will hold and decide at the time if he will keep them. Thinks they will buy depressed asset in Europe after that.