Fairpoint Communications, Inc. (FRP)

terminusaquo (< 20) Submitted: 6/26/08 8:35 PM : Start Price: $6.88 FRP Score: 7.59

FRP is changing hands at an attractive price for those interested in a well-managed company that pays a hefty dividend (currently projected at 11% for next year). Their strategy--to acquire rural and suburban land-line and wireless properties as the big telcos such as Verizon exit smaller markets--is bland and hardly unique, but FRP aims to succceed by supplying quality, customizable products that include actual customer service. To my eye, they seem to be doing a fine job. The stock is down because of a recent dividend reduction, which was a contractual necessity in a recent acquisition, as well as a delay in disconnecting from Verizon's systems in that same deal. Debt is significant but not unwieldly, and investors may find confidence in the fact that FRP is a Bill Gross recommendation in Barron's 2008 Mid-year Roundtable. Stash it in your ROTH IRA!

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