Frontier Communications (FTR) Stock Surges to New One-Year High (Update)

Update (2:30 p.m.): Updated with Windstream information.

NEW YORK (TheStreet) -- Frontier Communications  (FTR) surged to a 52-week high of $7.24 on Tuesday on heavier-than-average volume.

Last week, the FCC approved the telephone company's proposed acquisition of AT&T's (T) local wireline, broadband and video operations in Connecticut. Frontier also has Justice Department approval and is awaiting approval from the Connecticut Public Utilities Regulatory Authority. The company expects to close the acquisition in the fourth quarter pending PURA approval.

The stock also received a boost from Windstream's  (WIN) announcement that it would spin off its assets into a publicly traded REIT to gain the benefit of tax savings. The news has led the telecommunications sector higher on Tuesday, as investors speculate peer companies could follow suit.

The stock was up 15.74% to $6.88 at 10:12 a.m. More than 51 million shares had changed hands, compared to the average volume of 11,791,700.

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Separately, TheStreet Ratings team rates FRONTIER COMMUNICATIONS CORP as a "hold" with a ratings score of C. TheStreet Ratings Team has this to say about their recommendation:

"We rate FRONTIER COMMUNICATIONS CORP (FTR) a HOLD. The primary factors that have impacted our rating are mixed - some indicating strength, some showing weaknesses, with little evidence to justify the expectation of either a positive or negative performance for this stock relative to most other stocks. The company's strengths can be seen in multiple areas, such as its expanding profit margins and solid stock price performance. However, as a counter to these strengths, we also find weaknesses including deteriorating net income, disappointing return on equity and weak operating cash flow."

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