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dipped in at 2.85, pretty happy with that. hope for a quick return but as
they say stranger things have happend lol
j c
they say stranger things have happend lol
j c
TLS - Telstra Corporation
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I was having a close look at TLS last night and thought the same thing but there are much better opportunities out there atm so ive passed for now
DYOR
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Hands up who shorted them on the way down? If the revenue is dropping form their land lines what is it being replaced with? More mobile phones? Or do people just don't have a phone hanging on the wall anymore? 
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Whats the latest with TLS guys? I see they are back below the $3 mark again due to the reporting season. Surely they are worth more than $3? How will the election affect them?
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Probably another analyst or broker recommendation, always a good time to exit or short.
Interesting read
http://www.smh.com.au/business/telstras-dividend-under-siege-20100816-1266j.html
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It's probably less a case of the election, but Monday's going ex-dividend. The last couple of days may have been influenced by dividend strippers. In the end, I sold, netting an immediate profit, rather than having to wait for the 14c to be paid in September and Franking Credits a year later - if I'd get them.
Regardless of the election outcome, I find it quite conceivable that Telstra may drop below $2.80 next week. And if they lose control of "their" copper network, and are coerced to add and support bandwidth in the bush, profitability will be further reduced. Our pollies fly the economy by the seat of their pants - and with short-sighted targets in 3-year election rhythms. That's never going to turn a utility like Telstra into a future-proof, profitable enterprise.
I struggle to see how TLS can be valued above $3. It is a declining political football that is kicked from pillar to post. Nothing gets votes and ratings like bagging TLS. No matter when you bought this company, if you still hold it you have made a loss. We can argue about the great dividends (which they have to borrow money to pay for????!!!! How can this be a great long term strategy for shareholders?) but at the end of the day it has been on a downward slope for years and shows no sign of slowing. Every time they come out with a report it shows how they are losing more customers and money. We can blame changes in technology, political parties, managment, customer service...... the list goes on and on but at the end of the day - as an investment this company is one of the worst.
My opinion only - do your own research. Even better - try to find someone that has had a good experience with this company in ANY form - customer, employee, shareholder, regulator. I'm sure there is one out there - I just haven't met them yet.
malachii
PS - I do not own shares in this company so maybe my opinion is biased.
You may struggle to see tls fair value above $3 so at what price would you put on them?
Huntleys have them at a buy with a fair value @ $3.60.
True that Telstra over the years has declined in value and long term holders would be very dissappointed but at some point as in most shares there's a bottom.
How much lower can it go before there's a correction?
It's not as if Tls earnings are going to disappear in a hurry, they are a low risked share and are leaders in the field. They just have to get their act together & win back customers. I would have thought that they're in the drivers seat to do this.
Imo they are a good buy. If there's a hiccup in the world market, a double dip it would be one of the least of companies to be effected by it as shown in the past.
I personally think it's a buying opportunity especially next week when they'll more than likely fall after the ex div date.
Julia
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I read an article last week suggesting that the dividend on TLS is vulnerable, giving how much difficulty they are in.
Sorry, I can't now recall where it was.
Sorry, I can't now recall where it was.
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There is info about it in the link in my post 745 above Julia, probably similiar summary.
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In regards to that $3.60 target. I have read many people say that TLS is way under-priced in the world stage of telecommunication operators. I would also imagine the land-line profits they get well only be switched over to mobile handsets. Who here has Voda, 3 and Optus that has poor reception or non constant 3g transfer?
springhill
Make the drill work for YOU
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3 steal alot of customers off telstra due to better plans and the fact they roam to the telstra network in areas where the 3 network signal is not available. 75% of my friends would be with 3.
McCoy Pauley
Get out of here Budweiser!
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Probably multiple sources. Hard to maintain the dividend in the face of declining earnings and NPAT.
Hence Telstras goal on winning customers back & moving with the changing market.
Imo Sol Trujillo stuffed up Tls big time with its new billing system, customer service ect. Didn't help their cause.
Tls still hold the cards it's just a matter of working with the customers & gaining them back.
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interesting that 3 roam telstra network. sounds good but then I read this "Roaming charges are 50c per megabyte for customers using X-Series Packs, or $2 per megabyte for casual use.
Prepaid customers are charged $8 (Bonus) or $5 (Cap) per megabyte.
Monthly mobile broadband users will be up for 50c per megabyte (previously $1.65), while prepaid customers will get 15M for $7.50 instead of the old 4M allowance."
so anyone wanting telstra coverage is better off just going on a telstra
service. shouldn't take long before 3 customers realize this and switch to telstra.
Prepaid customers are charged $8 (Bonus) or $5 (Cap) per megabyte.
Monthly mobile broadband users will be up for 50c per megabyte (previously $1.65), while prepaid customers will get 15M for $7.50 instead of the old 4M allowance."
so anyone wanting telstra coverage is better off just going on a telstra
service. shouldn't take long before 3 customers realize this and switch to telstra.
People are expecting too much when buying stocks
Lower your expectation and you be surprise what you get in return.
I actually want TLS to lower its dividend to 20c if its earn 30c
a share and use that cash cow to starve its rival and I hope Thodey will
do that...
at $2.90 expect 15 to 20 cents dividend and you still get
5.1 to 6.8 franking yield
that is very good compared to long term bonds.
but there are someone who always argue bonds is safer, sure it is safer that why the return on investment is low that why Stocks offer better pay off when things do align.
so if people cant handle the volatility of the stock price bonds or bank deposit should be their thing
people buying TLS at higher price may not like it but price is paramount
for any investment when you consider its intrinsic value.
Expect a few more years of slow earning before TLS becomes a more efficient
machine... given that expectation TLS can deliver 20 EPS a year and you wont panic too much before the giant start to turn.
Always compare your return to long term bond return not some high rise double digit fantasy but if stock do deliver double digit return when you expecting 8% return a year then you just accelerating your compounding return
good luck and you know what to do when you recognise value and I am a TLS share holder only recently
Lower your expectation and you be surprise what you get in return.
I actually want TLS to lower its dividend to 20c if its earn 30c
a share and use that cash cow to starve its rival and I hope Thodey will
do that...
at $2.90 expect 15 to 20 cents dividend and you still get
5.1 to 6.8 franking yield
that is very good compared to long term bonds.
but there are someone who always argue bonds is safer, sure it is safer that why the return on investment is low that why Stocks offer better pay off when things do align.
so if people cant handle the volatility of the stock price bonds or bank deposit should be their thing
people buying TLS at higher price may not like it but price is paramount
for any investment when you consider its intrinsic value.
Expect a few more years of slow earning before TLS becomes a more efficient
machine... given that expectation TLS can deliver 20 EPS a year and you wont panic too much before the giant start to turn.
Always compare your return to long term bond return not some high rise double digit fantasy but if stock do deliver double digit return when you expecting 8% return a year then you just accelerating your compounding return
good luck and you know what to do when you recognise value and I am a TLS share holder only recently
Julia
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So it's unreasonable to buy a stock with the expectation that the SP will rise?People are expecting too much when buying stocks
Lower your expectation and you be surprise what you get in return.
Yes, I suppose if you have no expectations of making a capital profit, you're not going to be so disappointed when the SP falls.
Sorry, ROE, but - unless you're taking a very, very long term view (and even that's suspect under the present circumstances) - that's a pretty hard sell imo.
Long term bonds are a very poor investment at present. But why limit the comparison of buying TLS to just bonds?
I'm currently getting 8% on a term deposit, certainly no chance of capital gain, but in the current market, having no risk of capital loss feels pretty good to me.
So why wouldn't you in the meantime put your funds into something with more security, or if choosing shares, a company with a more optimistic outlook regarding rising SP?
People are expecting too much when buying stocks
Lower your expectation and you be surprise what you get in return.
I actually want TLS to lower its dividend to 20c if its earn 30c
a share and use that cash cow to starve its rival and I hope Thodey will
do that...
at $2.90 expect 15 to 20 cents dividend and you still get
5.1 to 6.8 franking yield
that is very good compared to long term bonds.
but there are someone who always argue bonds is safer, sure it is safer that why the return on investment is low that why Stocks offer better pay off when things do align.
so if people cant handle the volatility of the stock price bonds or bank deposit should be their thing
Is a company with declining revenue and shrinking market share a good buy with a dividend at 6.8%? I would say not - I can get similar or better dividends with companies that are growing and have good managment. You cant compare it too bonds. As you say bonds are safer. If I'm going to take out a higher risk I want a higher return - not the same return. That just doesn't make sense.
TLS dividend has to be at risk. How can a company borrow money to pay a dividend? That would be like me borrowing from the bank because I dont earn enough in the hope that in the future I might get a pay rise AND ignoring the fact that I'm working less and less hours a week!
The other argument of "last week this work selling for 3.30 therefore at 2.90 its a bargain" is rubbish. The chart shows that over the last X (pick a number) years it has been in a decline. Until the company changes drastically - it will continue in decline. It is still one of the most expensive providers of services and has an incredibly poor reputation for customer service. I have yet to see any sign of managment seriously dealing with these issues - so what is the trigger for change?
To say that there income is stable or always going to be there is being proven wrong every year. The decline in their "bread and butter" areas is real and not showing any sign of reversing. The uptake of "new" areas is increasing - but not at a rate that can counteract the other declines and pretty much all of the new tech areas have heavy competition from major players who are not restricted by Politicians.
I am not bagging TLS because I hate the company. I just cant see any reason to risk my money with them. They have a bad history, with bad management, in a bad industry, surrounded by bad political policies and are showing no tangible way to change this. Please prove me wrong. Please show me that my assumptions are wrong. I'm keen to be proven wrong on this but I've yet to see any argument backed by facts. Even the "professionals" (huntleys was quoted previously) dont really show any credible arguments to change. Just that "if all things stay the same - maybe its worth a bit more than now"! I'd also be interested to see if huntleys still think it is worth $3.60 because I think that report has been out a little while.
malachii
PS - I dont own TLS shares. This may make me biased!!!
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Well I don't think that Thodey is the same "bad" management that Sol may have been, the current media coverage shows that he is taking a major run at improving customer service, whilst also beginning to squeeze the competition on cost - see their quick change in smart phone plans.
They also have the hardware that Australia will need in the future, like it or not, and very big corporate muscle, so it is quite questionable to label TLS a company that is just rubbish and finished and going down the drain.
Although they have not performed and are losing market share, this does not change the underlying fact that they are tesltra, not Optus or 3; that is a big difference...I have friends who have recently moved back to TLS for their service recently, I wonder if this is reflected in their churn over the coming quarters?
They also have the hardware that Australia will need in the future, like it or not, and very big corporate muscle, so it is quite questionable to label TLS a company that is just rubbish and finished and going down the drain.
Although they have not performed and are losing market share, this does not change the underlying fact that they are tesltra, not Optus or 3; that is a big difference...I have friends who have recently moved back to TLS for their service recently, I wonder if this is reflected in their churn over the coming quarters?
Malachii you may not own Tls shares now but you certainly seem to have been burnt from them in the past.
Sol was a biggest set back for Telstra & he's gone now.
I have faith in the management and what they can deliver.
I look for a company like Telstra where it's been dogged in the past & has the ability to gain back customers and revenue.
Huntleys last analyst was the 16th of August 2010 with a fair value of $3.60.
I suppose you could find better returns in other companies but if there were double dip with GFC Telstra shares would be least affected as it has been in the past. Each to their own.
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