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Ringing Up Profits From Vodafone

NEW YORK (The Street) -- It has been a delightful voyage for those of us sailing on the good ship Vodafone (VOD).

I've accumulated shares since June and had the good fortune of being on board when VOD decided to dispose of its 45% interest in Verizon Wireless to its joint venture partner, Verizon Communications (VZ).

My timing is sometimes imperfect, as I noted in September's From A to V: Why I'm Buying More Apple and Vodafone. But with VOD's dividend and the rumors circulating back then that it might sell its Verizon Wireless holding, I figured my average buying price of less than $30 a share was a bargain. It was. As of Friday, VOD shares are down 2.3% for the year to date.

It won't be long now before Vodafone, whose shares closed Friday down 1.2% to $38.41, carries out its intentions to enrich its shareholders, in cash and in Verizon shares, in what Vodafone Chairman Gerard Kleisterlee calls a "Return of Value" of nearly $84 billion.


Kleisterlee wrote in December that the return of value to shareholders is "...equivalent to U.S. $17 per ADS at current prices." The exact amount of the vaue to be returned to shareholders depends on a number of varying factors described in detail in the circular distributed to all shareholders. If you're interested or directly affected you'd be well-served to visit the company's Investor Relations Web page.

The entire experience of buying and holding shares of VOD through this process has been both rewarding and attests to the fact that there are times to accumulate a concentrated position on a well-run company that either has a lot of cash, an enormous operating margin or holds a fortune in the shares of another great company.

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