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Orange (ORAN)

Orange (ORAN) from Contra the Heard Orange (ORAN), the former France Telecom, has had a lovely run since the beginning of the year. Our feeling is that there is lots more upside in store for this leading telecom provider in France. Operations also cover Poland, Spain and parts of Africa. But...

Orange (ORAN) from Contra the Heard

Orange (ORAN), the former France Telecom, has had a lovely run since the beginning of the year. Our feeling is that there is lots more upside in store for this leading telecom provider in France. Operations also cover Poland, Spain and parts of Africa. But hey, if you want to visit corporate headquarters, plan a jaunt to Paris.

Orange is enormous, with revenues of almost $56 billion. Debt is a heavy $53 billion, not unusual for enterprises in this sector. Cash flow from operating activities is almost $10 billion. That helps finance the dividend. The book value is around $12.50.

Orange has been retreating from some markets. Recent sales have included the operations in the Dominican Republic and Uganda.

When we bought into this company, European telecoms were verboten to many investors. The tide appears to have turned, and though not exactly in favor, potential shareholders appear to be finding this sector less unsavory. That could bode well for the stock price.

Our initial sell target is $27.74. That could take a while, but in the meantime, we are content to accept the fat dividend.

Benj Gallander, Contra the Heard Investment Letter, www.contratheheard.com, 416-410-4431, July 4, 2014

Benj started investing during the 1970s and manages the President’s Portfolio. Back in the day, he specialized in starting businesses and corporate turnarounds. Once upon a time, he also taught at the college level. He co-founded Contra the Heard in 1995. Over time, he has refined his approach to investing and has achieved one of the best track records in the investment industry.Benj is a regular guest on the Business News Network, writes the Contra Guys column for The Globe and Mail with Ben, and writes for a number of magazines. Over the past few years, his speaking engagements have taken him across Canada, to various locales in the United States and to South Africa. He has travelled to over 30 countries, working in about half a dozen. His best-selling books include: The Uncommon Investor III: How to Earn Superior Returns in the Stock Market Despite Everything, The Contrarian Investor’s 13: How to Earn Superior Returns in the Stock Market and The Canadian Small Business Survival Guide.Ben manages the Vice-President’s Portfolio and started investing during the 1970s. Prior to starting Contra with Benj in 1995, he was a software designer with over 25 years of experience working in industries ranging from accounting and healthcare to petroleum and transportation. After years of successfully co-managing the President’s Portfolio, he started the Vice President’s Portfolio in 2010, adding diversification for Contra subscribers. Ben writes the Contra Guys column for The Globe and Mail with Benj. Aside from stock picking, he is an avid curler.