Wednesday, February 11, 2009 2 comments ++[ CLICK TO COMMENT ]++

BCE expects positive, but low, growth in 2009

My idea of a company to own is not BCE but I'm planning to hold it after my risk arbitrage failure. So I'm a long-term shareholder and will be paying a bit more attention to it from now on, although large-cap telecoms are very boring and nothing really happens :)

Anyway, BCE expects positive, but very low, earnings growth in 2009 of at least 5%. It also boosted its dividend, currently a yield of 5.8%, by 5%. In the last quarter, it bought back 20 million shares, which is around 2.5% of float. It plans to buyback another billion worth of shares (approx. 5% of market cap) in 2009 with its cash.

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2 Response to BCE expects positive, but low, growth in 2009

February 11, 2009 at 7:34 PM

At the risk of being overbearing, remember that you don't have to earn it back the way you lost it.

I had a blown arbitrage on SHO last year that I just had to cut my losses and run, even though I thought it was undervalued.

February 11, 2009 at 8:46 PM

Yep... that was something I was thinking about before the deal collapsed. I was wondering whether I should set a stop-loss or not. The price will gap down but at least I will get out right away and forget about it. I decided to hold it if it failed. I usually tend to enter deals that I have no problem holding if it fails so it makes it easier (in contrast, professional risk arbitrageurs likely don't hold.)

One of the reasons I don't mind holding is because I'm bearish and in the mild-deflation camp. Companies like these, as well as utilities like Puget Sound Energy (if the deal had failed) should be able to do well given their almost guaranteed cash flow stream.

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