Cincinnati Bell Popped: What You Need to Know (CBB, T, VZ)

Cincinnati Bell Popped: What You Need to Know

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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: Did you think the old Ma Bell had been virtually reconstituted with AT&T's (NYSE: T ) bid for T-Mobile? Think again. Even leaving Verizon (NYSE: VZ ) aside, there are still a few pieces of Ma scattered here and there, and one of them is worth 11% more now than then -- "then" being yesterday.

So what: Cincinnati Bell (NYSE: CBB ) is its name, and providing fixed and wireless communications is its game. The Ohio-based telecom reported an 11% rise in revenue last night and a 12% rise in "adjusted EBITDA."

Now what: That sounds pretty good, but remember to read the fine print on your wireless agreement. While C-Bell claims to have earned adjusted earnings before interest, taxes, depreciation, and amortization of $530 million, the devil is in the BITDA details. Ex-out the ITDA, and C-Bell actually netted only $0.08 per share in GAAP profit, down 20% from last year -- and a mere $5 million in free cash flow.

What that means is that this $640 million telecom, pegged for 2.5% long-term growth, is selling for about 27 times GAAP earnings today. It's a bit cheaper when valued on free cash flow (5.3). But considering that, unlike its larger telecom siblings, C-Bell doesn't pay any dividend at all, it's still no bargain for the growth rate.

Want to learn more about Cincinnati Bell? Add it to your watchlist.

The Steve Jobs Betrayal
You may already know that in the final year of his life, Jobs revealed a stunning betrayal — and told his biographer, "I will spend my last dying breath... and every penny of Apple's $40 billion in the bank to right this wrong." What was it that made Jobs so irate — and why could it make a few in-the-know investors some major profits over the coming months and years?

Enter your email address below to find out what made Jobs so enraged!

Fool contributor Rich Smith owns no shares of, nor is he short, any company named above.

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