TLS - Telstra Corporation

[sptrawler]

While we are on the subject of Telstra, they have sold part ownership of their exchanges, should be a sugar hit.

https://www.smh.com.au/business/com...perty-fund-to-raise-cash-20190816-p52hqv.html

 

[fiftyeight]

A quick question, with the financial results that Telstra produced, what about them would encourage you to hold or indeed buy?
From my perspective, I would rather wait and see how much traction 5G gets and what new technologies come from it, before committing. An increase in mobile phone connections and a decrease in income, isn't a great signal.
Also a 5c dividend on a 60% income pay out ratio, does bode well, when they have conceded the income will drop next year. Maybe I'm missing something, but I can't fathom where the blue sky value is, can someone help?
Just my opinion.

Not much to be honest, there was nothing surprising or new in there. (From the small pieces I have read, I dont follow TLS closely...yet) Which why I was curious as to what was in there has made you want to jump ship again?

Yes I think it is about time, for me to jump ship, again.

One thing I have started to ponder, 'IF' 5G is a 'national strategic asset ' maybe Telstra will get some kind overly generous conditions/funding/deal/protection to roll out it out

 

[So_Cynical]

Maybe I'm missing something, but I can't fathom where the blue sky value is, can someone help?.

Not bright blue sky, very little bright blue sky for almost anything at the moment, after all's done TLS will be a very simple big business with
a simple offering dominating a must have market, everyone has a mobile and the infrastructure required to operate the network is a moat of sorts.

 

[galumay]

Maybe I'm missing something, but I can't fathom where the blue sky value is, can someone help?

Does anyone think there is? Its a bad business getting worse, 5G is mostly marketing, it offers no real world advantage for most users over 4G. The infrastructure cant handle much increase in usage if there was a larger than expected takeup of 5G anyway.

Its a crappy sector and Telstra are the worst of the operators in it. I see their blind incompetence every day in my company, their support and service is actually getting worse - something I would not have thought possible. I would deal with at least one major stuff up with NBN provisioning by them every week, and it usually results in the loss of a long term business customer.

 

[So_Cynical]

I would deal with at least one major stuff up with NBN provisioning by them every week

I thought the NBN contractors do all the provisioning - is Telstra an NBN contractor?

 

[sptrawler]

Not bright blue sky, very little bright blue sky for almost anything at the moment, after all's done TLS will be a very simple big business with
a simple offering dominating a must have market, everyone has a mobile and the infrastructure required to operate the network is a moat of sorts.

Which goes back to the underlying NPAT and the sustainable dividend payout ratio, which I mentioned.

 

[sptrawler]

Not much to be honest, there was nothing surprising or new in there. (From the small pieces I have read, I dont follow TLS closely...yet) Which why I was curious as to what was in there has made you want to jump ship again?
One thing I have started to ponder, 'IF' 5G is a 'national strategic asset ' maybe Telstra will get some kind overly generous conditions/funding/deal/protection to roll out it out

IF 5G proves to be the massive leap forward, as the gurus say, Telstra will be in the box seat.
However even if that is so, I feel there will be many years of dwindling income and major expenditure, before it comes to fruition.
Just my opion.

 

[Knobby22]

5G needs a tower within 200m.
I don't see how this will be practical in the country.

 

[galumay]

I thought the NBN contractors do all the provisioning - is Telstra an NBN contractor?

The ISP's do the provisioning, occasionally other ISPs stuff it up. Telstra stuff it up more than any other. (Some Telstra techs are now trained and onboarded as NBN contractors, but thats nothing to do with provisioning.)

 

[galumay]

IF 5G proves to be the massive leap forward, as the gurus say,

As someone in the industry, I have never heard anyone outside Telstra suggest there was any 'leap forward' in 5G, its 90% marketing spin, I doubt thats going to save the business!

 

[sptrawler]

5G needs a tower within 200m.
I don't see how this will be practical in the country.

That is where the nodes come into play, as relay transmitters in populated areas, apparently.
In the country, there will always be blackspots IMO

 

[sptrawler]

I'm out, gave back part of the profit from last trade.

That proved to be a good move Boggo, TLS have been on the slide ever since and IMO they have a long way to go.
The 5G will eventually be a winner, if the technology does in fact drive autonomous vehicles, but that is a long way into the future, if at all.
The reality is, if 5G doesn't bring about technology that demands far reaching mobile coverage, then Telstra is spending a lot of capital to replace existing infrastructure needlessly.
On the other hand, if the technology does become a must have feature, to drive productivity and efficiency improvements, then Telstra is in the box seat.
It is a big gamble that they probably had to take, time will tell if it puts a brake on the slow slide to the pack.
Just my opinion. I don't hold.

 

[Boggo]

...

It is a big gamble that they probably had to take, time will tell if it puts a brake on the slow slide to the pack.
Just my opinion. I don't hold.

Trying to trade it is a bit of a gamble too at the moment sptrawler as you never know what is next with them.
They have been predictable on the way up, may do the same on the way down ?

If it plays out then in should move into the W.4 retracement area between 38.2% and 50% but if it breaks below $3.40 then all bets may be off until next support around $3.27 (see chart below).

Watching this behaviour is an interesting exercise anyway and I picked up a few $$ on the way up, some good warrants available for short term hit and run trades. Lets see where to from here.

(click to expand)

 

[sptrawler]

With your charting skills, I'm sure you will start and pick up a pattern, IMO the institutions will be lightening up, so volume may be the indicator that sets the pattern. Not that I know anything about charting.

 

[sptrawler]

I wonder where the TLS price will settle? I suppose it will depend a lot on where the earnings per share ends up at, post the NBN payments and reduction in operating costs (8,000 people).
Eventually it will become a good income generating share, if the price is right.
I don't hold TlS.

 

[Boggo]

Follow on from post #2353 above (and from MCR thread reference).

Weekly chart, turned at the minimum reversal of fib 0.382 but waiting for an indication that a reversal may be in play at my "eyeball" test of 3.745.
Just my again.

(click to expand)

 

[Boggo]

Follow on from above...

Starting to think that the boundaries for the next direction (up or down ?) have been set.
Will be interesting to watch.

(click to expand)

 

[sptrawler]

Things still aren't looking rosy with Telstra $2.1b net profit after tax (down 39%), $1.9b dividend sounds like a 90% payout ratio, which in a capital intensive company is unsustainable. IMO

https://www.asx.com.au/asxpdf/20190830/pdf/4481dd1gqc2tkn.pdf

 

[Boggo]

Things still aren't looking rosy with Telstra $2.1b net profit after tax (down 39%), $1.9b dividend sounds like a 90% payout ratio, which in a capital intensive company is unsustainable. IMO

Next few days should show if this is already priced in to the last few months, I'm tending to think it is ?

 

[sptrawler]

Next few days should show if this is already priced in to the last few months, I'm tending to think it is ?

It has been ranging around your predicted price, so you could be right, they will still have to strip out a lot of costs to maintain the dividend around this level.