Frontier Corp. (FRO) Takeover candidate @ $47? Message Board

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Technology Stocks : Frontier Corp. (FRO) Takeover candidate @ $47?

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To: Sean M. Aruda who wrote (10)	8/15/1996 11:03:00 PM
From: Richard Malcolm	of 13

The rumors that FRO is a takeover candidate is not new, but this is the first I've heard of a specific price target. I have seen references to them in several papers including the Rochester D & C. Several brokerage firms have also mentioned the possiblility. The jump up in prices and volitilaty in June were certainly caused by such rumors. This has been a well run conservative company the quickly became the 5 th largeast lond distance carrier in the country last August 95 with the purchase of ALC Communications. 13 % of the outstanding shares are hled by institutions, less than 1 % by management. The present management has been in place a long time and started the growth of the company from a regional phone service company to a very strong long distance carrier and cell phone provider. You can check out their web page at www.frontiercorp.com for further comments. The management has done a series of acquisitions over the past ten years to enhance the base phone service and expand the long distance service. They have signed working agreements with NYNEX for cell service in the eastern and southern tiers of NY. They are currently having a long labor dispute with the local unions ( in Rochester) which the company seems to be winning. The company also penned an open market agreement for local service which Time Warner and AT & T have been trying to make use of. Time Warner really doesn't have aclue on how to run a phone system and AT & T just complains that the agreement isn't fair. I wouldn't place too much emphasis on feared local competition. As I said the company is very conservatively run, this has apparently caused some strife among the managements of Frontier and ALC. Many of the head honcos of ALC have left to work with an phone aggregator in Seattle. I have been in and out of this stock for many years as a safe, conservative, dividend paying, covered write. This has given me anywhere from 5 to 15 % a month in total return - not bad for a stock that has only traded between 27 - 33 in the last four months! Next years estimates call for $ 2.04 a share giving it a current PE of 15 just slightly higher than the average PE of 13. Don't buy it based on a rumor, buy because it 's a well run company. If there is a takeover than you've got a bonus. May the trade be with you. Rick

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