Stock A L'Orange

 | Sep 30, 2013 | 10:30 AM EDT  | Comments
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I am writing this column from Paris. We have all heard about the economic travails of Europe, including France, which is supposed to be in the economic doldrums.

Well, looking at Paris, you would never know anything was amiss. High-end restaurants in such desirable districts as Saint-Germain-des-Pres and the Marais are filled with diners. Shoppers fill stores. At night, the streets bustle with people, and the French certainly look prosperous.

Being here got me thinking about what French corporation might be worth recommending to my readers back home. I found one called Orange (ORAN). Never heard of Orange? You have probably heard of France Telecom, France's legacy phone carrier. France Telecom, as of July 1, became Orange. The company operates in 29 countries, so it is not strictly tied just to France. But it does have more than 60% of France's landline business and is a major wireless carrier, too.

I decided to get a feel for what the French think of Orange. Plenty complain, about the length of time its takes to get a phone line, the price, whatever. Their complaints remind me of complaints Americans made about Ma Bell when it controlled most of the U.S. phone market. But these same people seem to prefer Orange for their landline Internet connection, even more than cable, due to the Orange's reliability. This is generally the opposite of how U.S. consumers view telephone DSL landline vs. cable Internet.

One place you will not find complaints about Orange is from my James O'Shaughnessy-based strategy, which is very positive about the company. This strategy, like a number of others, is a computerized version of how well-known investment strategists invest. I created these strategies so I could quickly analyze any stock in the style of great Wall Street thinkers.

My O'Shaughnessy strategy looks at four qualifications and Orange easily meets all these tests: large market cap ($32.6 billion), strong cash flow per share, large number of shares outstanding (2.7 billion) and huge sales ($57.2 billion). The strategy takes all the companies that have these qualifications and chooses the top 50 based on their dividend yield. Orange makes it into this elite group with a yield of 5.41%.

This is a company with legacy market power and a track record of being competitive not just in its home country, but elsewhere as well. If you are looking for a solid performer to add to your portfolio, Orange fits the bill.

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