Through its operating subsidiaries, the Company engages in the communications business. The Company is facilities based provider of a range of integrated communications services.
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Whilst sniffing for value in the diversified communications industry I came across a most foul stench...
'Twas Level 3 Communications... which scored a dismal 29 out of 100 points in the Smelloscope scoring system. On 1-10-11 at a price of $1.11 LVLT smelled worse than any stock I've yet sniffed.
Here's why:
-Terrible earnings
-A nerve-wracking number of Total Current Assets compared with Total Liabilities
-Inconsistent and unstable debt to equity ratio
-Negative ROE%, ROA%, and net profit margin with terrible 5 year trends
-Negative book value per share
-A deceptively low price to sales masked by lots of long term debt
-Very high short interest (as a percentage of float)
The bottom line:
LVLT really only has one thing going for it: Netflix. Aside from that, the outlook doesn't seem too bright. And given some of the interesting decisions happening over at Netflix lately... I'm not sure they are going to provide the light at the end of the tunnel that Level 3 Communications will inevitably need to see it's way through this red-inked mess.
I could be wrong about the long term outlook for LVLT... and I wouldn't put real money on shorting it. I will give it a thumbs down with the Stankometer because given it's current situation Level 3's fundamentals smell about as good as...
well... umm... hmm...
...I'll hold off on that metaphor. I don't want to gross you out too much. But I will say that Ace Ventura pretty much echoed my sentiment about LVLT when he shouted: "Do NOT go in there... WOOO!!!"
~djshagggyd
(official nose of the Stankometer)
Full Discloser:
I don't own a long or short position in LVLT.
TheSmelloscope is a value rating system created to evaluate stocks for fun. It is operated by a novice investor named djshagggyd. NOVICE being the key word. Do not follow the Stankometer's advice without conducting your own research.
LVLT has every NFL stadium wired, it broadcast the last superbowl in HD from Texas & has superbowls ahead, it got a govt. contract w/ the FBI for it's net security, they've been around over a decade. I'm just saying, it's got more then Netflix going for it & even still, Netflix is a pretty big fish. You really think $1.11? I'm not an advisor but LVLT costs less than Rite Aid.
Your probably right movinpaper. I don't claim to be an investment wizard or to know all there is to know about LVLT.
All of my (novice) analysis is based off of about 3 hours worth of studying LVLT's fundamentals, their news, and their technicals... 3 hours is certainly not enough time to discover all there is to know about a company... but I did the best I could with the time and information available to me.
Best of luck with LVLT!
~djshagggyd (official nose of the Stankometer)
In 4 months the stock price has gone way up from $1.11 to $2.15. Not bad.
The only thing going for LVLT is NFLX? Haha, ok, no one should take a word you say seriously. *pat pat pat*