Monday, July 30, 2007

Hit #175 (Rural Cellular)

Rural Cellular (RCCC) is being acquired by Verizon in a cash deal. The $45/share offer represents a gain of 733% over my average cost of $5.4 (bought a bit more than 2 years ago).

I have mentioned Rural Cellular a couple of times in the past, first when the then SBC bought BellSouth, and later when the original AT&T got acquired by SBC (the new AT&T).

The other targets mentioned in those posts have all been acquired in the recent past. Dobson Communications was bought by the new AT&T, and Alltel by private equity.

Centennial Communications (CYCL) remains a target, though not sufficiently attractive to be a buy right now. Citizens Communications (CZN) is another rural operators that, with a current yield of 7% and trading near its 52-week low, looks like a bargain.

Windstream (WIN), which recently bought CT Communications (CTCI), is itself a very compelling buy now for long-term holders. I expect Windstream to get taken out eventually. In the meantime the 6.5% yield, and hoped-for appreciation, will do a good job of contributing to juicy returns.

Warwick Valley Telephone (WWVY) and North Pittsburgh Systems (NPSI) are also speculative bets, though not stocks I am comfortable buying at present. A buyer for these may come from others listed in this post!

Still keeping the focus on rural service providers, cable/broadband providers like Mediacom Communications (MCCC) and Knology (KNOL) will be natural targets now. I have owned Mediacom shares for a while now, though nothing much has really happened to the shares since I bought them. I will be holding till the buyout.

Time Warner Telecom (TWTC) and recently spun off Time Warner Cable (TWC) are also worth watching, with the latter still making for a good buy.

Previous hit - Greater Bay Bancorp (#174)


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