This makes perfect sense - in fact I was wondering why it didn't happen sooner. First, FRO is a very well managed company. Second, they have posted 26% total returns for many years. Third, they are based in Rochester, NY (home of more than its share of Fortune 500 firms). Fourth, P/E ratio, while not as low as contemporaries (ALLTEL, et al.), is low for this market. Fifth, they are progressing into convergent service offerings, bundling local, LD, wireless and Internet, and the approach they are using is correct. Sixth, they own their own long distance company and don't have to resell. Seventh, their marketing group has assembled some very interesting offerings. Eighth, they didn't run from competition when reform bill was passed. Instead they met it head on with the nation's first open market plan. Ninth, their territories would be a perfect fit for either BANYNEX or Ameritech expansion. Remember, Ameritech hasn't announced any partners yet, they need the leverage and have the cash on hand.
I study the effects of Telecom Reform for a living (strategic analyst for a LEC). I'm in FRO already and upping my stake on Monday. |
