Why NTELOS Is Ready to Rebound

Based on the aggregated intelligence of 180,000-plus investors participating in Motley Fool CAPS, the Fool's free investing community, wireless communications services specialist NTELOS Holdings (NASDAQ: NTLS  ) has earned a respected four-star ranking.

With that in mind, let's take a closer look at NTELOS and see what CAPS investors are saying about the stock right now.

NTELOS facts

Headquarters (founded)

Waynesboro, Va. (1897)

Market Cap

$261.9 million

Industry

Wireless telecommunication services

Trailing-12-Month Revenue

$454.0 million

Management

CEO James Hyde

CFO Stebbins Chandor

Return on Equity (average, past 3 years)

26.5%

Cash/Debt

$76.2 million / $494.1 million

Dividend Yield

13.4%

Competitors

AT&T Mobility

Sprint Nextel 

Verizon Communications

Sources: S&P Capital IQ and Motley Fool CAPS.

On CAPS, 94% of the 129 members who have rated NTELOS believe the stock will outperform the S&P 500 going forward.

Earlier today, one of those bulls, Steven261, succinctly summed up the NTELOS bull case for our community:

This stock has good prospects because of its profitability compared with its competitors (EPS, margin), its low price compared with its year-lows (probability that it will go up rather than down), and its appealing dividend (13.42% annual yield).

If you want market-beating returns, you need to put together the best portfolio you can. Of course, despite a strong four-star rating, NTELOS may not be your top choice.

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Read/Post Comments (2) | Recommend This Article (2)

Comments from our Foolish Readers

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  • Report this Comment On March 08, 2013, at 2:04 PM, NoFoolInvest wrote:

    Some analysts worried that Sprint maybe not renew contract with Ntelos in 2015 due to that Softbank took over Sprint. It is myth. Ntelos start building more modern wireless powers in their local area this year. It will be better choice for Sprint to acquire Ntelos for these asset and customer database with cash injected from Softbank instead of setting up their own.

  • Report this Comment On March 17, 2013, at 1:46 AM, rsinj wrote:

    The bull case is weak and completely out in left field because at this time the only investors holding the stock are those in it for the dividend. There is no earnings growth, the debt to equity is at an astounding 1100%, the PE of 15 is too high, the dividend of $1.68 per share is unsustainable as it is double the EPS. To cap it all off, current analyst price target is $14.25.

    With the recent earnings announcement, the company went to great lengths to not actually state the EPS for the quarter. Go read the press release, it's pretty funny to read.

    2012 EBITDA was lower than 2011. 2013 EBITDA guidance was that it would be flat to up by 2% - that's pretty weak and telegraphed that EPS is going to be roughly the same as 2012.

    Bottom line is that there is a minimum dividend cut of 50% coming and as a result, that is going to keep a lid on any stock price increase.

    I really don't see any credible investment thesis that makes the stock a buy at this time. If the dividend were reduced by 50% and the stock price were cut in half, then and only then would it be a buy. At this time, there's only one place for the stock to go and that's down.

    Maybe you can make some minimal gains trading it between $12 and $14 until the day comes when the next shoe falls. I wouldn't want to be holding the stock when that day arrives.

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