Frontier Communications Corpora (FTR) research, news, and more from GeoInvesting

Company description

Wed, 06 Feb 2019 14:30:02 GMT

Frontier Communications Corporation provides communications services to consumer, commercial, and wholesale customers in the United States. It offers broadband, video, voice, and other services and products through a combination of fiber and copper based networks to consumer customers. The company also provides broadband, Ethernet, traditional circuit-based, and voice services; and software defined wide area network, multiprotocol label switching, and time division multiplexing data transport and optical transport services to small, medium, and large enterprises, as well as advanced hardware and network solutions and services, and customer premise equipment. In addition, it offers 24/7 technical support; wireless broadband services in selected markets; satellite TV video services; voice services, including data-based VoIP, and long distance and voice messaging services; and a package of communications services. Further, the company provides a range of access services that allow other carriers to use facilities to originate and terminate their local and long distance voice traffic. As of December 31, 2017, it served approximately 4.9 million customers and 3.9 million broadband subscribers in 29 states. The company was formerly known as Citizens Communications Company and changed its name to Frontier Communications Corporation in July 2008. Frontier Communications Corporation was founded in 1927 and is based in Norwalk, Connecticut.

Research

Mon, 03 Feb 2020 18:30:56 GMT

Frontier Communications Corpora (NASDAQ:FTR) (Telecom Services)

The pitch on FTR was a contribution by Adam Spittler on February 6, 2019. We unfortunately were never able to get an update from the author of the original article, as promised. So, we decided to offer our two cents. At this time we view investing in FTR as an even more risky proposition and one we are not comfortable betting on right now, especially with no guidance from the author. However, we would be interested in revisiting the story if FTR enters and exits Chapter 11 Bankruptcy.

Recall that FTR has been in a tough financial state due to its high debt burden of $17 billion and with new management not making early moves to transition its business to a fiber product offering:

“The problem with her strategy was that while focusing on a dying business, her strategy was to neglect developing fiber and new technologies to better compete with Coax and Fiber, and to make it up with scale.”

After a brief run from $2.00 to $3.50, the stock has been in a tailspin ever since.

Although the company eventually developed a fiber growth strategy, it has not been able to produce enough growth to offset customer churn and the high debt burden.

The company is in the process of selling $1 billion of assets to pay down its debt. That would still leave the company with mounds of debt which has investors believing that the risk of bankruptcy is still very real.

Research

Wed, 03 Apr 2019 14:49:37 GMT

Frontier Communications Corp (NASDAQ:FTR) ($2.43, $256.4m market cap) - On February 6, 2019 we wrote an article explaining why we believe Frontier’s equity could have 25x upside if the company is able to dodge its nearly $17 billion debt risk. FTR provides communications services to consumer, commercial, and wholesale customers in the United States.

The idea was brought to us by a friend and contributor Adam Spittler (email: a_spittler@hotmail.com), and with his help we took a deep dive into the company's debt maturity schedule and potential to generate cash over the next couple of years.

We have received some inquiries from some of you regarding FTR. Adam is still bullish on the name and we may prepare a follow up article in coming weeks.

However, as indicated in the original article, this is a very high risk/high reward scenario. The company still has a lot of debt, a lot of work to do to get out of its hole and gain trust with the market. Overall, we think the company has won round 1 in a multi round battle against its debt. Some of the company’s bonds show strength after FTR’s Q4 report, while the equity has given back a good deal of its big move it made after Q4.

Research

Tue, 12 Mar 2019 16:51:31 GMT

Frontier Communications Corp (NASDAQ:FTR) ($2.60, $273.8M market cap) announced this morning that it intends to offer $1.650 billion aggregate principal amount of First Lien Secured Notes due 2027 in a private transaction. The company will use these notes to roll out near term debt maturities, as it explained:

Frontier intends to use the proceeds from the offering to repay all outstanding indebtedness under its senior secured term loan A facility, which matures in March 2021, and its credit agreement with CoBank ACB, which matures in October 2021, and to pay related fees and expenses. In addition, upon the closing of the First Lien Secured Notes offering, Frontier expects to amend its credit agreement with JPMorgan Chase Bank, N.A. to, among other things, extend the maturity date of at least $835 million of its $850 million revolving credit facility from February 2022 to February 2024 (subject to certain springing maturity dates). The maturity date of any revolver commitment not extended will remain February 2022. The offering of First Lien Secured Notes is subject to market and other conditions.

We believe that FTR will have no issue filling out this offering and that rolling out the near term debt is a great move that will give near term bonds (specifically the 2021’s) and the equity some breathing room. This is one of several ideas that our recent article on FTR suggested that the company take in order to help to deal with its burdensome debt load.

Research

Mon, 04 Mar 2019 16:13:34 GMT

Established a Speculative Bet in FTR Calls

Frontier Communications Corp (NASDAQ:FTR) ($3.12; 329.3M market cap) - On February 6, 2019, with the stock around $2.08, we wrote an article explaining why we believed Frontier’s equity could have 25x upside if the company was able to dodge its nearly $17 billion debt risk. After FTR posting better than expected Q4 2018 results, we have taken a small speculative bet in $5 FTR call options expiring in May 2019.

You can see our summary of the Q4 results here.

Research

Wed, 27 Feb 2019 05:00:00 GMT

Frontier Communications Corp (NASDAQ:FTR) ($2.51, trading up 20%; $264.9m market cap) - On February 6, 2019, with the stock around $2.08, we wrote an article explaining why we believed Frontier’s equity could have 25x upside if the company was able to dodge its nearly $17 billion debt risk. It was - and remains - a precarious position for the company, but yesterday’ afternoon’s earnings seem to point that the company is moving in the right direction. The stock opened near $3.00 today, representing a 44% increase since our report. Here are some of the highlights from yesterday’s earnings report and conference call:

Rev 2.12m flat YOY for first time in years.
CC noted Q1 revenue is extremely strong.
Consumer churn improved to the lowest rates in FTR history
Consumer ARPU increased YOY from 81.61 to 86.05 as legacy CTF teaser contracts roll off
EBITDA of $895m is the first increase QoQ since the CTF purchase
FCF of $620m is the highest annual figure in recent FTR history
Management hit their guidance for the first time in the past few years
Management did a fantastic job of explaining the situation on their conference call for the first time in a long time and should be commended for the transformation
2019 guidance is materially conservative allow management to under promise and over deliver for the first time in recent history
2019 and 2020 debt maturities now appear to be easier to solve with operational FCF
2021 secured debt will be more likely to roll
2022 wall of debt now looks to be manageable to relatively easy to handle given FCF guidance of $575m – $675m 2019 FCF
In summary, the FTR death rattle has definitely quieted - we expect the stock to move higher on these results and possible analyst upgrades.

The FTR idea was brought to us by friend and contributor Adam Spittler (email: a_spittler@hotmail.com), and with his help we took a deep dive into the company's debt maturity schedule and potential to generate cash over the next couple of years. We arrived at the conclusion that any long position in the equity should be viewed essentially as a call option at this point.

Research

Tue, 26 Feb 2019 16:51:23 GMT

Frontier Communications Corp (NASDAQ:FTR) ($2.43, $256.4m market cap) - We are keeping Frontier on watch and members should be aware that the company is set to report earnings after the bell today.

On February 6, 2019 we wrote an article explaining why we believed Frontier’s equity could have 25x upside if the company is able to dodge its nearly $17 billion debt risk.

The idea was brought to us by friend and contributor Adam Spittler (email: a_spittler@hotmail.com), and with his help we took a deep dive into the company's debt maturity schedule and potential to generate cash over the next couple of years. We arrived at the conclusion that any long position in the equity should be viewed essentially as a call option at this point.

Research

Wed, 06 Feb 2019 15:49:48 GMT

FTR Common Could Have 25x Upside if the Company Can Dodge Debt Risk

Today we are releasing a long form research note on why we believe Frontier Communications Corp (NASDAQ:FTR) ($2.10, $221.7m market cap) equity could have up to 25x upside by 2021, if the company can narrowly avoid its debt burden risk. FTR is essentially an equity stub - a stock that is being priced for bankruptcy, down 97% over the last 3 years

The idea was brought to us by friend and contributor Adam Spittler (email: a_spittler@hotmail.com), and with his help we took a deep dive into the company's debt maturity schedule and potential to generate cash over the next couple of years. We arrived at the conclusion that the equity should be viewed essentially as a call option at this point, but that there is a favorable enough risk/reward profile for us to consider a small speculative investment in the name.

We were intrigued by the idea because we often like to take risk in special situations where the upside could be materially attractive when the markets are betting against potentially positive catalysts. They don't always work out, but the way to beat the market is it bet against the crowd.

You can read our entire publication on FTR here. The note is on a 1.5 hour embargo for our premium members and will be released to the public around 11AM EST.

Research

Wed, 28 Feb 2018 15:21:08 GMT

A Note From Maj - Mario Gabelli Tweets FTR

While the majority of our investing decisions arise from organic research, when it comes to making money our team is not relegated to just our in-house idea generation. That's why we are always encouraging investors to join and contribute to our community. A few hand-picked contributors have actually had a rather good track record and have added value to our service as a whole. Our goal is to continue to build this side of crowdsourcing intelligence.

Part of this task also entails following bloggers and tweets from investors we respect. Iconic fund manager Mario Gabelli happens to be one of those investors. We love Mario Gabelli’s style - a diverse strategy that expands across a wide range of market caps, including micro and even nano cap stocks. This morning we came across a Gabelli tweet regarding Frontier Communications (NASDAQ:FTR), a communications services provider in the United States. It seems he is viewing the company as a special situation play. The stock is down on Q4 2017 results, but here is the tweet he put out regarding the stock:

Frontier Communications (FTR) .....company focusing on basics and debt reduction (sell assets , eliminate div) ...investors should focus on values of remaining business

We plan to take a deeper look into the story.