BCE, which was at one time known as Bell Canada reported earnings up 31% this morning and added another 17 cents per year to it's already nice payout. We consider BCE nothing more than AT&T in our northern neighbor, but with less regulatory baggage and certainly less worries about spectrum from the Obama administration. The beauty of BCE is that it is in just about every media that exists in it's Canadian market and keeps on killing the competition. Be it television service, Internet, wireless, even the old wire line business BCE is making money and making gains.
The problem is that now the stock price has finally moved up to reflect the quality of this communications powerhouse. We have owned every month for likely three years 1200 options at $40 share on BCE producing nice cash flow. The last 4 months we doubled that position to 2400 contracts at $40 per share due to our belief in the prospects of BCE and cash flow has been more than nice since the company has hovered around the $40 strike price.
Now with today's move up or almost $2 per share the stock has now approached $45 per share and in our opinion the stock is finally valued right. However that does not mean it is not still a nice buy and will hold the investor's value at the current price and send you the 5% dividend going forward.
One note BCE is subject to the 15% dividend tax in Canada and will be deducted prior to your receiving the payment. You can deduct the Canadian tax against your tax liability in the US.
Update on WIN. Seems that this stock is on a roller coaster as we posted yesterday the stock was up nicely, but today down 30 cents per share currently on a downgrade by a major brokerage firm. Go figure here, I have never known a brokerage to make a recommendation one day prior to an earnings report. We still hold a large position in this company and believe the report will be good.
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