Every time Wall St. looks at Level 3 (NASDAQ: LVLT) it sees promise. The company provides broadband pipes all over the US and some abroad. In a world where high-speed data, video, and voice are powering internet traffic, the shares should be the perfect investment.
But, they aren’t. Over the last year, LVLT is off close to 60%. It is hard to find any other widely-traded stock in that neighborhood.
Level 3 shares were downgraded today, by Morgan Stanley, from "equal weight" to "underweight" In layman’s terms that means sell the shares as soon as possible. According to Reuters the MS research note said "Level 3 expects to generate negative free cash flow in 2008 and remains highly leveraged." The news sent LVLT down another 6%.
Level 3 still has $6.3 billion in long-term debt, and, without any operating profits, it is an unlikely buy-out target.
The two men who run Level 3, James Crowe and Kevin O’Hara have been at the company for almost a decade. The board is made up of retired executives, a former college professor, and an admiral who runs the nominating and governance committees, all asleep at the helm.
Douglas A. McIntyre
Essential Tips for Investing: Sponsored
A financial advisor can help you understand the advantages and disadvantages of investment properties. Finding a qualified financial advisor doesn’t have to be hard. SmartAsset’s free tool matches you with up to three financial advisors who serve your area, and you can interview your advisor matches at no cost to decide which one is right for you. If you’re ready to find an advisor who can help you achieve your financial goals, get started now.
Investing in real estate can diversify your portfolio. But expanding your horizons may add additional costs. If you’re an investor looking to minimize expenses, consider checking out online brokerages. They often offer low investment fees, helping you maximize your profit.
Thank you for reading! Have some feedback for us?
Contact the 24/7 Wall St. editorial team.
Editors' Picks
