Wednesday, September 1, 2010

Bell Aliant Regional Communications Income

I got some of this stock (TSX-BA.UN) from BCE in July 2006. I never bought it. I sold what I got in January of 2008. My total return, including dividends, is a negative 4.8% per year. I did not like this stock then and I still do not like it.

I will not take up a lot of anyone time in reviewing this stock and I will just have one blog entry for it. One thing I do not like is the accounting. I find that some make no sense. You have two companies being reported on, the Income Fund and the Limited Partnership Holdings. I am not sure how to read these reports and what figures to use. Maybe if I spend some more time on their statements, I may be able to figure out more, but there are better companies that have more straightforward accounting in comparison. Point is, is it worth my while to spend more time on this company. Problem is I feel it isn’t.

I know that the distributable cash looks good, but this will not count after this year, as the company will be a corporation. Distribution must come down, because, as a corporation, they cannot give out too much of their cash flow. They are distributing a high percentage, and if analysts are to be believed, they will distribute in 2010 more than 80%. This is not good.

There are a number of analysts following this stock. They give recommendations of Strong Buy, Buy, Hold, Underperform and Sell. The vast majority is a Hold and the consensus recommendation would be a Hold. (See my site for information on analyst ratings.) No analyst expects this company to earn in 2010 what it did in 2009 and ditto for 2011.

This is not a stock I would care to own. I am tracking it because I once had some and there are still lots of analysts following it. If feel that it is sometime good to follow stocks you do not like as well as stocks you do. Investing is always a learning process.

Aliant is one of North America's largest regional communications providers serving customers in six Canadian provinces with information, communications and technology services, including voice, data, Internet, video and value-added business solutions. Through their information technology division, xwave, they also provide IT professional services in Canada and the United States. Bell Aliant derives virtually all of its income from its indirect ownership in Bell Aliant Holdings LP. Its web site is here Bell Aliant. See my spreadsheet at ba.htm.

This blog is meant for educational purposes only, and is not to provide investment advice. Before making any investment decision, you should always do your own research or consult an investment professional. See my website for stocks followed and investment notes. Follow me on twitter.

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