Why Windstream Shares Plunged
May 10th 2012 11:15AM
Updated May 10th 2012 4:14PM
Although we don't believe in timing the market or panicking over market movements, we do like to keep an eye on big changes -- just in case they're material to our investing thesis.
What: Shares of telephone company Windstream (NAS: WIN) sank as much as 16% today after its quarterly results disappointed Wall Street.
So what: While Windstream's first-quarter miss wasn't all that bad (adjusted EPS of $0.13 on revenue of $1.55 billion versus the consensus of $0.14 and $1.56 billion, respectively), investors seem worried that it's a sign of even bigger disappointments down the road. In fact, the stock is hitting a new two-year low on the news.
Now what: I'd look into this pullback as a possible buy-in opportunity. "I am extremely confident in the business that we have built," CEO Jeff Gardner reassured investors. "Through targeted acquisitions and our strategic growth initiatives, we have assembled an attractive set of assets capable of generating consistent cash flows to support our dividend over a long period of time and to provide other opportunities in the future to increase shareholder value." With that dividend now yielding a juicy 10%, long-term income investors might want to take a closer look.
Interested in more info on Windstream? Add it to your watchlist.
At the time this article was published Fool contributor Brian Pacampara owns no position in any of the companies mentioned. Try any of our Foolish newsletter services free for 30 days.We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Fool's disclosure policy always gets a perfect score.
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