To: diddlysquatz who wrote (94 ) 2/14/1998 2:08:00 AM From: hsg Read Replies (1) | Respond to
Admitted, things look bleak. Your points are well taken. The bond Rating services look to issues like working capital, times interest earned, book value to debt, ect and these have all deteriorated (drastically). The stock has also fallen from over 20 dollars to around 5. My point, as an investor who likes out of favour stocks (contrarian) which look like turn arounds. Why do I think this stock has a high chance of turning it's fortunes around (and making me some money)? Heres why: the cable margins have improved a great deal from the low in the industry to one of the highest (cost management). Cable is now the jewel (if you can call it that) of the company. The debt downgrade hurts Rogers ability to raise cash in the future which they do not currently have planned. They are generating enough cash to finance their current infastructure upgrades. The outstanding debt may rise in yield and fall in value but the interest Rogers pays is not affected, and it actually makes it cheaper to retire. I realize the debt rating change is not a reason to celabrate. I am just looking at what it does to Rogers in the short term. Which is nothing. Cable is doing better, now what about cellular? Well, they are moving drastically to cut costs and restructure price plans to improve market penatration. I have close contacts with management in Cantel and my understanding is that they are pursuing drastic measures to cut their costs. Will it work? I don't know, but they are trying. What about the competition in cellular? Are they making loads of cashola while Cantel bleeds red ink all on it's lonesome? I think not! Look at their #'s! This industry is in the price war stage to aquire customers (at an initial loss). Do you know how many customers Microcell has? I do, and they have a long way to go to get to any reasonable economy of scale. Did you see their #'s? Lot's of red ink to go around in this industry. Rogers is not doing well. The stock(s) have been battered (shattered). I think they are turning the ship around due to intense shareholder (institutional) and debtholder pressure and I think, regardless of whether or not they do, the share price has bottomed out. That's all I care about. If the share price goes up I'm a little less poor, and if it doesn't then I'm a little more poor. I'm betting it does, but I enjoy your negative (factual) comments and hope for my own benefit this company turns around long enough for me to make some money.
