Lumen Technologies: A Promising Opportunity for Investors Antonio Velardo, a renowned stock picker and analyst at Moat Investing, has been making waves in the investment community lately with his latest call on (META), which has seen a 45% surge in value. Velardo focuses on Lumen Technologies, a global communications company that offers cloud infrastructure and managed services to businesses, governments, and consumers.
As a value investor, Velardo always looks for undervalued companies with solid growth potential. With its commitment to innovation and customer satisfaction, Lumen Technologies is a company poised for growth in the digital landscape. With 190,000 on-net buildings and 500,000 route miles of fiber optic cable globally, the company is well-positioned to offer a wide range of services to domestic and global customers.
However, Lumen has been struggling to grow meaningfully, with a disappointing revenue growth of 7% over the past nine years. Additionally, the company's high level of debt, roughly five times its market cap, raises concerns for investors. But Velardo sees potential for Lumen's transformation efforts as the company pivots from a telecommunications company to a technology company, entering new sectors such as hybrid IT, cloud, and edge computing. The recent appointment of a new CEO, Kate Johnson, who previously served as the president of Microsoft for US operations, brings valuable expertise to Lumen and is a positive sign for the company's future growth.
Lumen's suspension of its dividend and sale of non-core assets, including its Latin America operations for $2.7 billion, its ILEC business for $7.5 billion, and some of its operations in Europe, the Middle East, and Africa for $1.8 billion, highlights the company's eagerness to turn things around. The incoming funds from the divestiture of non-core assets could be used for debt repayment, share repurchases, or growth initiatives.
In conclusion, Antonio Velardo is bullish on Lumen Technologies and sees it as a promising investment opportunity. With its commitment to innovation, strong network, and transformation efforts, Lumen is a company to watch closely. However, given the high level of risk involved, Velardo recommends taking a cautious approach and limiting any investment to a 1% position until more clarity on the company's future emerges. Follow Antonio Velardo's call on Lumen Technologies and stay ahead of the curve in the investment world. By the way, Antonio Velardo has also noted that Lumen is not a classic value stock, but it does appear to be beaten down. Unless the CEO does something unexpected in earnings, he does not see a significant downside. This investment opportunity has caught Velardo's attention, and he suggests investors follow his call closely.
You can follow Antonio Velardo's articles on his blog, www.antoniovelardo.com, or SeekingAlpha under his founded investment analysis group Moat Investing.
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