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Decisionplus T-mbt with many fresh Links talking about MANITOBA TELECOM | clusty

many notes below from Andrew L. de Courcy-Ireland, CIM, FCSI
Portfolio Manager CANACCORD CAPITALTel: (514) 844-5520

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2008

Tuesday 11 November 2008 (MBT : TSX : $42.90)
Disciplined wireless entry; takeout potential and limited downside

Monday 10 November 2008 (MBT : TSX : $42.16)
Q3/08 in line but pension, funding and economy pose headwinds
BMO Capital Markets downgrades to "outperform", 12-month target price is cut to $50.00
Desjardins Securities downgrades to "hold", 12-month target price is raised to $43.00
GMP Securities maintains "hold", 12-month target price is $39.00
RBC Capital Markets maintains "sector perform", 12-month target price is reduced to $46.00

Sat 04/10/2008 TF $42.17 Target Price Range $46.25 -$ 47.25 Long-Term Bullish

Wednesday 13 August 2008 Manitoba Telecom Services (MBT : TSX : $39.46)
Margins dip; transition costs surprise
Desjardins Securities maintains "buy", 12-month target price is $46.50
GMP Securities maintains "hold", 12-month target price decreased to $39.00
Haywood Securities maintains "sector outperform", 12-month target price is $51.00
Scotia Capital Markets maintains "sector perform", 12-month target price is $47.00

Monday 12 May 2008 (MBT) - $41.15 - Q1/08 Earnings - In Line With No Surprises
Sector Perform, Average Risk, Price Target: $52.00
MBT reported EPS of $0.84, ahead of RBC CM’s $0.81 estimate on higher "Other Income." Both revenue and EBITDA were in-line with expectations. Both the Consumer and Enterprise (Allstream) divisions were in-line. Consumer subscriber growth was modestly softer, with TV adds of only +1.3k (vs. 2k expected and 3k last year), Internet of +3.6k vs. 6.6k last year. MTS claims that it scaled back on TV marketing in the quarter, but launched new promotions and activities in Q2 and that the pace of growth has picked up since then (1.2k adds in April). RBC CM remains cautious on MBT's prospects as a national wireless carrier (cautious on both the high capex required for a national build: over $1 billion shared 3-ways; as well as MBT's ability to launch a competitive and profitable carrier outside its home territory). Management made two comments on the call regarding wireless: (1) that the company will be "disciplined" in the auction and will not bid to win at any cost. (2) Management thinks the cost to build/launch a national carrier is near the low end of analyst estimates of $1.0-$2.2 billion, which matches RBC CM’s ~$1.3 billion estimate with spectrum alone costing $700MM for 30+MHz of national spectrum.

Wednesday 12 March 2008 (MBT : TSX : $39.24), Net Change: -0.76, % Change: -1.90%, Volume: 642,985
Shaw Communications (SJR.B : TSX : $18.66), Net Change: 0.56, % Change: 3.09%, Volume: 2,048,279 Rogers Communications (RCI.B : TSX : $37.69), Net Change: -0.35, % Change: -0.92%, Volume: 3,242,368 Hey, who invited you to the party? On Monday evening, Manitoba Telecom, the Canada Pension Plan Investment Board (CPPIB) and The Blackstone Group L.P. announced that they have formed a consortium to make a deposit and submit an application to bid as a new entrant in the upcoming Advanced Wireless Services (“AWS”) spectrum auction, which is scheduled to begin on May 27. The consortium made a $340 million deposit in the form of letters of credit to Industry Canada. At the same time, Shaw also announced that it has submitted an application to participate in Wireless Spectrum auction, although it did temper this announcement that participation in the auction should not necessarily be interpreted as an indication that Shaw intends to build out a wireless network. The ownership of spectrum will provide strategic flexibility as it may be utilized in a variety of ways and in a timeframe yet to be determined as the competitive communication market evolves. Industry Canada will release the names of all parties who have applied to participate in the auction on March 14, 2008, and will provide further information concerning qualified bidders on March 31, 2008. Increased competition will presumably make for tougher markets for BCE (BCE), Rogers, and Telus (T).

Manitoba Telecom Services (MBT : TSX : $39.25)
To participate in AWS spectrum auction
GMP Securities maintains "hold", 12-month target price is $43.50

Tuesday 11 March 2008 (MBT) and Blackstone (BX) teamed up with the Canada Pension Plan Investment Board to bid on wireless airwaves in a Canadian government auction. The group submitted a deposit to Industry Canada for the May sale, according to a statement. Yesterday was the deadline for the receipt of applications from companies that want to bid.

Wednesday 06 February 2008 (MBT) - $41.30 - Q4/07 Enterprise Revenue Improves,
But Investors Waiting For Wireless Update
Sector Perform, Average Risk, Price Target $52.00
Q4/07 EPS of $0.62 was in-line with consensus at $0.61 (RBC at $0.65). Consolidated EBITDA of $155MM (-1.2% yr/yr) was in-line with consensus of $155MM, (RBC at $159MM). Revenue from Allstream was much better than expected (though lower margin), and importantly the division reported its first quarter of positive revenue growth (+2.5% yr/yr) in several years. MTS added an impressive 17k wireless net adds in the quarter (vs. 11k estimated) with ARPU rising +4.2% yr/yr. Residential lines, however, declined –3.5% yr/yr with -10.5k lost in the quarter (-3k seasonally adjusted), which MTS believe is a stable run-rate going forward. MTS is still evaluating the wireless opportunity and investors will have to wait until March 14 for further details. RBC CM believes speculation surrounding MTS' wireless plans will weigh on the shares until clarified as a national expansion could cost up to $1 billion (versus MBT's $2.7 billion market cap). A strong strategic partner could allay some concerns, though MBT may not reveal its plan for several months.

(MBT : TSX : $41.30) Q4 preview
RBC Capital Markets maintains "sector perform", 12-month target price is $5.20

Friday 30 November 2007 Manitoba Telecom Services (MBT : TSX : $44.35)
Industry Canada issues spectrum auction rules that ensure a more competitive wireless industry
Canaccord Adams maintains a "sell", target of $42.50

Monday 05 November 2007 (MBT : TSX : $47.10) Q3 meets expectations
Canaccord Adams maintains "buy", 12-month target price is $42.50
Desjardins Securities maintains "hold", 12-month target price is $46.50
GMP Securities maintains "reduce", 12-month target price is $43.00
Haywood Securities maintains "sector perform", 12-month target price is $51.00
RBC Capital Markets maintains "sector perform", 12-month target price is $52.00

Monday 29 October 2007 Manitoba Telecom Services (MBT : TSX : $46.65)
Q3 preview
GMP Securities maintains "reduce", 12-month target price is raised to $43.00

Wednesday 17 October 2007
Manitoba Telecom Services Inc. (MBT-T) C$47.96
Vince Valentini, CFA, 416 944 7012
HOLD ¯ (Prior: BUY);Target: C$51.00 ¯ (Prior: C$52.00)

Friday 03 August 2007 Manitoba Telecom Services (MBT) - $45.85 - Q2/07 Residential Line Trends Improving, Raising Target from $51 to $52
Sector Perform, Average Risk, Price Target $52.00 (previously $51.00)
Q2/07 EBITDA of $171 million beat consensus of $163 million on strong margins in the Consumer division. EPS of $0.79 versus was up 16% ahead of consensus of $0.68. Residential lines increased for the first time in 2 Years as over 5,000 residential lines were added. The company raised its 2007 EPS guidance from $2.30-$2.50 to $2.55-$2.75. RBC CM believes there is further upside to the company’s EBITDA guidance of $625-$655MM, which implies H2/07 EBITDA will be flat to down - 9% versus 1.6% YTD which appears conservative and is raising its price target from $51 to $52 as it is applying a higher multiple to the residential wireline business.

NFB manitoba telecom services(mbt)$45.85 – All About the Dividend
RATING: underperform. TARGET PRICE: $45.00. RISK RATING: above average.
The shrinking legacy businesses still represent 62% of MTS’s revenue, so meaningful growth is not feasible in the near term. However, with evidence that the legacy erosion is no longer worsening, combined with unrelenting focus on cost control, MTS was able to increase guidance to the high end of the range for EBITDA and free cash and to a new $2.55-$2.75 range for EPS. This is enough to support the stock at current levels in our view. Following these results, we are increasing our estimates from revenue to earnings and free cash flow to the high end of the new guidance range. The revenue mix tells us free cash flow is not likely to grow in the near term. However, the current dividend reflects a payout ratio of just 65% of free cash, suggesting the company has up to $80 million in cash it can spend on wireless in 2008 if it chooses. Despite this, we cannot assume the dividend is safe until we know what the company’s wireless plans are, likely in late 2007 or early 2008. MTS has traded off about 8% in the past month versus 5% for the broader market. In our view, much of the M&A and/or privatization conjecture has now dissipated, which is positive since we consider them low probability events. Also, the company did not acquire any stock under the buyback program this quarter and since it still has up to 5% of total shares (3.1 mln) left, the stock should have support in the near term.

Wednesday 13 June 2007 Manitoba Telecom Services (MBT): $48.81 - Shares Fully Valued And Takeover Less Likely In Near Term Sector Perform (prev: Outperform), Average Risk (prev: Above Average Risk), Price Target: $50.00 (prev. $54.00)
The previous $54/share target price was based on the assumption that MBT was a prime takeover candidate, either by one of its larger Telco neighbours or as an LBO target. However, with at least one of MBT's Telco neighbours targeted for privatization, RBC CM believes a follow-on acquisition of MBT is less likely in the near-term. Furthermore, MBT's potential plans to expand wireless nationally and increase balance sheet leverage may lower privatization economics. RBC CM believes MBT shares still offer an attractive dividend yield (5.3%) and management has expressed a strong commitment to keeping the dividend even if a wireless expansion proceeds. Longer-term, RBC CM believes MBT is still an attractive target for its larger Telco peers, and in fact a privatized peer may be able to better justify an MBT takeout (rather than trying to convince public shareholders) due to the significant synergy potential for a MBT combination (upwards of $200MM/year cost savings), plus the value of UCC tax losses (which have an indefinite life), and MBT's incumbent wireless facilities. Furthermore, if MBT successfully finds a global wireless partner for a national expansion, then an eventual takeout is possible if/when foreign ownership limits are lifted.

Sunday 03 June 2007 Manitoba Telecom (MBT) - $49.17 - Management Meetings Put Spotlight on Growth and Wireless
Outperform, Above Average Risk- Price Target: $54.00
RBC recently hosted several investor meetings with Manitoba Telecom management. The company’s comments suggest that it is likely to pursue a national wireless expansion with a partner, but that it remains committed to the dividend in spite of the potentially substantial capex investment required for a wireless launch. RBC CM believes that while a takeout of MBT is still possible, the shares appear well valued and recommends that investors trim weightings above $50.00 per share.

Sunday 13 May 2007 Manitoba Telecom Services (TSX: MBT) - $49.30 - Q1/07 – Tracking Ahead of Guidance
Outperform, Above Average Risk, Price Target $54.00 Q1/07 results beat expectations. EBITDA was $165 million (up 1% year-over-year) versus RBC CM $162 million estimate and well ahead of consensus at $156 million. Consumer EBITDA was up an impressive 5.1% year-over-year to $98 million ($91million expected) on better cost cutting. Enterprise revenue and EBITDA were light relative to expectations, which management attributed to lost AT&T/Rogers revenue and lumpy timing for certain unified communications revenue. Since bottoming at 8.6% in Q3/06, MTS' residential wireline losses have moderated and lines declined only 5.7% year-over-year this quarter (versus national average of 7.2% year-over-year) due to MTS' intense bundling efforts. Line losses should continue to slow in Winnipeg. RBC CM believes the company is tracking to the high-end (or above) 2007 guidance. However, the improvement comes from cost cutting and interest/depreciation savings and not revenue, which is probably nearing the bottom end of 2007 guidance. 2007 EPS estimate is raised from $2.47 to $2.78 and reflects a combination of higher EBITDA, lower depreciation and interest, and shares outstanding. 2008E EPS estimate is raised from $2.49 to $2.80 for similar reasons. RBC CM believes a takeout is still possible, but over $50/share it looks well valued and with a $54/share takeover target price recommends that investors trim weightings above $50/share.

Friday 02 February 2007 MANITOBA TELECOM SERVICES(MBT)$47.65 – Q4 REVIEW; NOTE THE CAUTION SIGNS. RATING: UNDERPERFORM. TARGET: $40.00. RISK RATING: ABOVE AVERAGE. INDUSTRY RATING: MARKET WEIGHT.
We believe that MBT may be supported by artificial demand. First, this stock is still harbouring some hope that BCE or TELUS will acquire the company. If you agree with us that this is not likely, then there is cause for caution. Second, MTS has been very aggressive with its buyback program. By our calculations, MTS represents 32% of the buy volume on the stock from mid-December until its blackout period in mid-January. At the current rate, the buy-back will be complete by Q2 2007, after which the associated demand will decline significantly. MTS reported some improvement in top line metrics. However, margins also declined sequentially in both the consumer and business (Allstream) divisions. We suspect some of the new growth initiatives have fairly steep acquisition costs associated with them. The Q4 2006 results suggest 2007 guidance is reachable, though we remain cautious on the potential to produce anything greater and given the volatility in the Allstream division, things could still get worse. Though the 10% share buyback should maintain support for the stock, it is a near-term catalyst since it is being funded by asset sale proceeds. Absent this support, the stock yields only 5.5% compared with 9.6% at Bell Aliant. In our view, there is downside to below our $40 target for MTS.

Friday 26 January 2007 MANITOBA TELECOM SERVICES(MBT)$46.19 – IS 2007 GUIDANCE ACHIEVABLE