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Strategies & Market Trends : Dividend investing for retirement -- Ignore unavailable to you. Want to Upgrade?

To: Spekulatius who wrote (12008)	6/29/2012 4:43:51 PM
From: 8bits	Respond to of 34328

If it weren't for the huge debt load, it would be a clear buy. As it stands, I think it is more speculative, although the valuation looks quite compelling. What are your thought on FTE..? finance.yahoo.com

To: Spekulatius who wrote (12008)	6/29/2012 4:59:20 PM
From: E_K_S	Respond to of 34328

Re:TEF I am not sure what the composition of their debt is but according to their 2011 annual report this was reported: pg-8- goo.gl In the US, Telefonica has issued an American dollar denominated bond for an amount of 2,750 million US dollars raised in February, distributed in two tranches: 5 year 1,250 million US dollars,and a 10 year tranche of 1,500 million US dollars. I would be a buyer if their debt was denominated in Euros and were earning $US. It would really be a currency play. My premise is the $US will gain relative to other world currencies (especially the EURO) by ar least 20% and maybe as high as 35% in the next 6-18 months. That's a big deal with a company that (1) has a lot of sales in non $US w/ $US denominated debt and (2) any new capital investments are $US (a lot of technology is bought from US companies). Also payout ratio is high at 127%. goo.gl They also spend a lot of Capital/share in CAPEX @ $21.99/share. What's the composition of these dollars spent $US and/or Euros. If they are using high valued $US and generating revenues from low valued "other" currencies (Brazil REAL, EURO etc), then it could be a net loser. goo.gl ------------------------------------------------------------------------- Many of the Canadian companies I follow have those "Yankee Bonds" that must be paid back in $US. February 8, 2012 Canadians Dish Out Dollar Debt goo.gl ...according to a Canadian government official. The five-year bonds were priced to yield an annualized 0.888%, or a paltry 0.08 percentage point above comparable U.S. Treasurys. The U.S.-dollar-denominated bond that matures in 2014 traded 0.06 percentage point below Treasurys on Tuesday. So this is only a good deal for Canada if the $US does not appreciate more than 6% to the $CAN. I expect 20% for $CAN and even more for the $EUR. Just look at what happened to the value of the Euro vs $US in the last 45 days. QE3 and "Operation Twist" do not help either. Remember you can not fight the FED. TEF w/ their $US denominated debt could bite them in the end if $US becomes the World's currency of choice (ie flight to quality). Just my opinion and something I am watching out for. EKS