RE: RE: RE: Great price today:)bultzYetta, you raise an interesting point. If the overall market falls (ie. there's a downturn), how does this impact SVC?
I don't have the answer but I think what helps SVC is that it has its business model pinned down and as investors, we all know where the money is being spent, how much and that there won't be any changes in the short term. Moreover, we know revenue has increased and it's expected revenues should increase overall in 2010. What no one knows is how far out SVC can project its revenue stream. Do they know they'll have revenue coming in for each of the quarters of 2011? If so, how much?
Overall, I'm confident SVC can ride through any downturn, small or large, by doing what it has been doing. An ancillary question is will ISP's stop spending on SVC like solutions if there is a downturn. I don't think so but time will tell and when there needs to be major cutbacks, funny things can happen. But it helps that many ISP's are reporting healthy quarterly results. I know that during a downturn, I'd spend less on other items before spending less on first, wireless, second, wireline and third, tv.
The other thing, as already mentioned, is SVC's cash position and zero debt. During a downturn, cash is vital as a worst case type of scenario and imo, SVC should continue hoarding it and hopefully adding to the pile each and every quarter in the event there is a downturn.
Imo, I want to see SVC run its business for the next year as if we're in a downturn and protect itself in a worst case type scenario and grow stronger out of a potential downturn, if any.