Ticket to Ride
Thornburg manager Walden taps China Mobile, Freeport-McMoRan, Level 3
By Jonathan Burton, MarketWatch
Last Update: 11:51 AM ET May 21, 2007
The technology and telecom boom of the late 1990s was very good to shareholders of Level 3 Communications Inc., as shares of the fiber-optic communications provider topped well over $100. But after the telecom bust in 2000 the stock tumbled into single-digits, where it remains.
Since the shares' collapse, Level 3 has been paying off debt and using capital for acquisitions to build market share, Walden says. He started buying those Level 3 bonds about five years ago, and now that the firm's balance sheet is stronger is focusing on the equity. Walden says the company's worst days are behind it and he's made Level 3 a top fund position.
"Level 3 had no organic growth until just last year," he said. "Now Level 3 can grow at a good rate and grow profitably."
The company operates one of the largest fiber-optic communications networks in the U.S. and Europe, with almost 50,000 miles of fiber connecting 175 cities, Walden says. Its main customers, he adds, include large telecom carriers, cable television providers and Internet businesses.
"They carry communications traffic, Internet traffic and the drivers of why this [company] is growing are things you see and use every day," Walden said.
On Friday, shares of Level 3 lost 2 cents to $5.34.
Jonathan Burton is MarketWatch's investments editor, based in San Francisco.
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