The past few days have been utterly painful for shareholders of Frontier Communications (NASDAQ:FTR). After analysts called the company’s dividend into question, shares have fallen sharply — and they have lost almost half of their value since just this January.
Does such a move mean that the company — and its headline-grabbing dividend yield of over 20% — is a buy at today’s prices? Would it be a better bet than putting your money behind a much safer telecom like AT&T (NYSE:T)?
Image source: Getty Images
The answers to these questions aren’t 100% knowable. But we’ll try to examine them by viewing the two companies through three different lenses.
Sustainable competitive advantages
If I had one piece of advice for beginning investors, it would be this: Spend all your time studying sustainable competitive advantages — otherwise known as “moats.” While valuation, industry dynamics, and total addressable markets aren’t unimportant, they pale in comparison with a company’s moat.
investing basics: Preferred Bank(PFBC)
Advisors’ Opinion:
- [By WWW.MONEYSHOW.COM]
Preferred Bank (PFBC) has surged 54% in the past year but still trades at a modest discount to the median S&P 1500 regional bank, based on both trailing earnings and estimated 2017 profits.
investing basics: iShares MSCI Europe Financials Sector Index Fund(EUFN)
Advisors’ Opinion:
- [By Wayne Duggan]
Investors looking to set up a pair trade to capitalize on the divergent paths of U.S. and European banks should consider going long the iShares Dow Jones US Financial (ETF) (NYSE: IYF) and short the Ishares MSCI Europe Fincls Sctr Indx Fd (NASDAQ: EUFN).
investing basics: TiVo Inc.(TIVO)
Advisors’ Opinion:
- [By Lisa Levin]
TiVo Inc. (NASDAQ: TIVO) shares were also up, gaining 21 percent to $9.30. The New York Times, citing sources familiar with the issue, said Rovi Corporation (NASDAQ: ROVI) is in advanced negotiations to acquire TiVo. TiVo shareholders would reportedly receive both cash and stock; however, the price tag is yet to be determined.
- [By Lisa Levin]
TiVo Inc. (NASDAQ: TIVO) shares were also up, gaining 20 percent to $9.22. The New York Times reported that Tivo and Rovi Corporation (NASDAQ: ROVI) are in merger talks.
investing basics: Shire plc(SHPG)
Advisors’ Opinion:
- [By Todd Campbell]
The partnered portfolio includes Movantik and Adynovate, which are licensed to AstraZeneca (NYSE:AZN) and Shire (NASDAQ:SHPG), respectively.
Movantik won Food and Drug Administration approval in September 2014 for use in relievingopioid constipation, and Nektar Therapeutics reports that annual prescriptions jumped 270% year over year in 2016. Currently, Movantik is selling at an annualized clip of about $160 million, and according to the licensing agreement, Nektar Therapeutics receives a 20% plus royalty on U.S. sales, plus potential sales milestone payments.
- [By Ben Levisohn]
Specialty pharmaceuticals Shire (SHPG) and Mallinckrodt (MNK) soared today following their better-than-expected earnings, while Morgan Stanley worried about Valeant Pharmaceutical International’s (VRX) ability to sell its unwanted assets.
- [By Max Macaluso and David Williamson]
At the end of last week, a Bloomberg article revealed that Shire (NASDAQ: SHPG ) and pharmaceutical giant Sanofi (NYSE: SNY ) may be circling ViroPharma (NASDAQ: VPHM ) . The the following video, from The Motley Fool’s health care show Market Checkup, analysts David Williamson and Max Macaluso take a close look at ViroPharma and discuss the recent interest in this small biotech company.
