Selling a Stock – BCE
- 4 Comment
I have been going through a full scale analysis of my dividend paying investments, trying to see where new money should be going, what stocks I need to keep a close eye out for, and what stocks are just not up to snuff.
As a result, I have decided to unload one of my holdings – BCE. BCE is Canada’s largest telecommunications company. In this case, being the largest has created a dog of a stock with poor performance of late. Here are the facts:
1. For the period 1995 – 2005 the compound revenue growth rate has been a brutal -4.2%
2. For the period 2004 – 2005 the compound revenue growth rate has been a less brutal, but still brutal -0.5%.
3. For the period 1995 – 2005 the compound EPS growth rate has been 3% – hardly a stock that is growing.
4. The dividend has seen few dividend increases in the last 5 or so years. The most recent increase was last year, but I do not hold much hope that there will be another one soon. Even if there is, it will hardly be enough to justify holding on to this poor performing company.
Based on these facts, I do not hold much hope for this stock in the future. If with fairly aggressive progressions the potential for a good upside return is minimal. The company is not performing well. If it was a quarter here and a quarter there of poor performance, I might be more forgiving – but the trend of bad performance is too strong to ignore and I feel I must act. I will break even on it, and that is after holding it for about 3 years. I strongly believe that my money can be redirected into a better dividend-paying company that will provide me with some growth. Once I am done my full analysis, I will let you know where that money will be going.
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4 Comments on this post
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Required said:
Good idea. BCE is looking bad. I wish I could remove it from my ETFs.
May 16th, 2006 at 11:18 am -
GIV said:
BCE’s problem for the last few years, and I believe for the next few, is that they grew half-assedly into too many businesses, and are now being cannibalized from all sides.
May 17th, 2006 at 8:18 pm -
CrossProfit said:
We are in total agreement on BCE. What is your opinion on; PKI @21.00 or below, SYK and NBR @34.50 or below?
Disclosure:
This reply was written by a CrossProfit analyst. This is a personal view and may not reflect the views of CrossProfit.com.
http://www.crossprofit.comMay 19th, 2006 at 4:58 am
[...] BCE – A Sell Gone Way Bad By The Dividend Guy If you have been following my blog for some time now, you will know that I do not sell stocks very often. The stocks I tend to buy, the real blue chip, dividend increasing type of companies never give me much reason to sell. This has worked in my favor more often than not. However, if I look back at a post I did on one of my sales, here, I wrote about why I was selling the Canadian telecommunications company BCE. [...]