Exploring the Old Frontier

With shares of Frontier Communications Corporation (NYSE:FTR) trading at around $4.24, is FTR an OUTPERFORM, WAIT AND SEE or STAY AWAY? Let’s analyze the stock with the relevant sections of our CHEAT SHEET investing framework:

C = Catalyst for the Stock’s Movement

This stock has gone nowhere for years. The yield might be enticing to some people, but it doesn’t mean much if the stock depreciates. Dividends have also been decreasing over the past two years. Therefore, that selling point has become more of a footnote.  

There were several negatives for Frontier Communications Corporation this year. These negatives included customers moving to wireless, customers making accusations of violations of the Internet Tax Freedom Act in relation to extra surcharges, S&P rating debt as negative, a failed acquisition of New England customers from Verizon Communications (NYSE:VZ), declining free cash flow, and a recently replaced CFO. However, despite all these problems, Frontier Communications Corporation has managed to hold steady.

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Believe it or not, there are positives for Frontier Communications Corporation. The last quarter saw an increase in broadband YoY, the company will be upgrading its network, and they will not hesitate to make acquisitions that will make them more competitive in the future. The latter note is the key. This isn’t a company that will sit on its hands, which means a turnaround story is possible.

Let’s take a look at some important numbers before forming an opinion.