Tag Archives: CHL
Months after the announcement of Softbank’s (SFTBF.PK) $20B acquisition offer forSprint Nextel (S), the bidding war is heating up with Dish Network’s (DISH) $25.5B offering. DISH’s deal will form a unique combination of pay-TV and wireless if it goes through. Ultimately, however, it is the valuation proposition that will matter. The final winner should be the one that provides Sprint the most long-term value, which would be to allow Sprint to compete in the rapid developing 4G LTE market.
Below is a comparison table for the deals from Dish and Softbank:
|Spectrum End/4G||Sprint and Dish can combine spectrum rights||While Japan’s Softbank and China’s China Mobile (CHL) are pushing TD-LTE forward, Sprint and Clearwire’s best 4G bet is to work with Softbank’s TD-LTE.|
|Edge||Install antennas for wireless broadband||Softbank has a stronger financial backing|
|Cost/Potential||Reduce cost by combining call centers and back-end functions; could result in $11B of cost synergies, including a 3.3 percent reduction in expenses the first year.||Clearwire’s 2.5GHz spectrum is uniquely positioned to be used as a global LTE band, provided a certain band configuration is used.|
|Penalty/Expected Completion||Dish will pay for $600M penalty fee for Sprint to break up Softbank’s deal||Expected to complete by mid-2013|
|Clearwire (CLWR) deal||With Dish’s own $5.15B for Clearwire, Sprint buyout bid is not contingent on Clearwire part||For Sprint, its own bid for Clearwire is contingent on the Softbank deal, as Sprint needs funding|
The markets have been in a rally mode since the beginning of 2013. The S&P 500 closed above 1,500 for the first time in more than five years on January 25, 2013, as strong earnings continued to boost the index. Investors’ sentiment is very bullish, and the market is driven by extreme greed. Nonetheless, intelligent investors know that too much optimism may not be a good thing, as quoted from Warren Buffett, “Be fearful when everyone is greedy. Be greedy when everyone is fearful.” The central theme of this article is not to predict the market direction, but to review a list of high quality large-cap stocks that generate strong free cash flow while continuing to grow its revenue. So, when the tide turns, investors can still count on steady cash flows from these stocks with solid fundamentals.
|Company Name (Ticker)||Revenue, ttm||Quarterly
Revenue Growth, ttm (yoy)
|Levered Free Cash Flow, ttm||Diluted
|Cisco Systems, Inc. (CSCO)||$46.68B||5.50%||$9.27B||$1.55||2.60%|
|China Mobile Ltd. (CHL)||$86.83B||6.60%||$5.26B||$4.97||3.50%|
|The Coca-Cola Company (KO)||$47.60B||0.80%||$6.42B||$1.91||2.80%|
Source: Yahoo Finance