PROX BB

Proximus SA de droit public

TMT


Presented:11/20/2014
Price:€30.78
Cap:$11.00B
Current Price:€6.62
Cap:$2.38B

Presented

Date11/20/2014
Price€30.78
Market Cap$11.00B
Ent Value$13.19B
P/E Ratio16.18x
Book Value€11.48
Div Yield4.2%
Shares O/S319.20M
Ave Daily Vol780,000
Short IntN/A

Current

Price€6.62
Market Cap$2.38B
Proximus SA provides telephony, Internet, and television services in Belgium. The company’s Consumer Business Unit (CBU) segment sells voice products and services, and Internet and television services, on fixed and mobile networks, to residential customers primarily on the Belgian market. Its Enterprise Business Unit (EBU) segment sells ICT services and products to professional customers, including self-employed persons, small companies, or corporations. This segment markets its ICT solutions, including telephone services primarily under the Proximus, Proximus, and Telindus brands on the Belgian and international markets. The company’s Service Delivery Engine & Wholesale segment centralizes network and IT services and costs, and provides services to CBU and EBU, as well as sells these services to other telecom and cable operators. Its International Carrier Services segment is engaged in international carrier activities. Proximus SA was founded in 1930 and is headquartered in Brussels, Belgium.Proximus

Publicly traded companies mentioned herein: Proximus (PROX BB), Liberty Global PLC (LBTYA), Mobistar SA (MOBB BB), Orange SA (ORAN), Vodafone Group PLC (VOD)

Highlights

The presenter is short shares of Proximus (PROX), the largest telecom company in Belgium (the government owns 56% of the shares), and believes its 50%+ gains year-to-date are primarily based on European investors’ flight to higher yielding securities (i.e., PROX pays a 5% dividend), not fundamental factors. He sees a number of issues potentially derailing the stock, including its current high valuation relative to historic norms and competition from new entrants into its core market(s). In addition, PROX's triple play (TV, internet and telephone) is among the most expensive packages in Europe, yet the presenter’s due diligence has led him to believe its product offering is inferior to what the competition offers.

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