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TLS - Telstra Corporation

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Studying the long downward trending chart, the current fall from 3.33 to 2.66 matches a previous decline of similar size (21%). Other falls have not been this size. This current fall is up there with the biggest. Following such a big fall, there has always been a nice bounce. I am thinking there is a relief bounce coming soon. Who cares if it is a dead cat. Again, studying the chart, bounces go for around 7 trading days after which you should off-load.
 

TLS competition is heating up. Just had a chat over the phone with one of my mates.. A Telstra rep came to his house, beat his Optus plan by $1 a month (I know not much but still..) but increase his internet data to 200gb, a faster connection and free local calls 24/7.

I believe TLS are getting very competitive.... they have to be now...
 

They are making an effort john as far as pricing etc is concerned.
I was with Optus for my mobile and Telstra for the landline (local calls only as interstate are done on VOIP).

I decided to with Telstra for a new contract for my iPhone (due to 3G coverage), a change of plan for the home phone and the two merged to one account.
Sounds simple and straightforward yes, not so, they completely cocked up every possible aspect of it, they blamed everything except Mabo for their inability to perform what they are advertising, they talked me into the setup but then it took them nearly four weeks to get it right.
Their problems apparently were because of the migrating of my accounts to to their new software.
Last week I got a bill of 5 pages for $157 that I cannot understand as it all seems to consist of debits, credits and adjustments. I though about giving it to my accountant daughter to analyse until she mentioned something in passing about issues she was having with them on behalf of a client with billing errors.

They have a long way to go john before the get it all in one pile I think, they are really going out of their way to initially accommodate new clients but when they get them is when the fertiliser impacts the mistral.
 
Telstra hit $2.60 then bounced but the bounce to yesterdays close of $2.66 could prove to be a dead cat bounce while the uncerainty of the impact/outcome of NBN remains in limbo.
Volumes of turnover have dropped as the price comes down to the analyst target of $2.60. Thodey's comment that tls can afford to continue to pay annual dividends of $0.28 (franked) make tls a high yielding share with tax beneifts for longer term holders at this price level.
Thodey appears not to be being backward about comming forward with the upbeat comments at the moment. Telstra to work on reducing staff and overheads; improve orientation to customer service; clear out stupid and uncompetative fees; release of new products and going toe to toe with the oposition on pricing.
All good news for those looking for a more competitive telstra grabbing back market share and improving profitability. As always the proof of the pudding will be in the eating.
 

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TLS

My preferred pattern on TLS moving down into 2.46-2.48 in October
hasn't played out, with minor support levels coming into play @ 2.58

I'd keep an eye on 2.72

If trading above then my view is a 2-month wave pattern upwards
into December's highs (target unknown as yet), and depending on the
price action push upwards into January (possibly around $3.26+)

If TLS struggles to rise higher than 2.87 in the last month of the
Quarter (December) then I would be reluctant to hold, especially if
the overall Index is struggling to remain above 4582 (read Weekly Report)
or has already reached 4900

TIME is the arbiter of risk-reward strategies
 

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Just when tls looked like it was attracting support and might wriggle back above $2.70, four days of trading saw the price pushed down to test $2.61.

Hopefully for holders it will bounce from here.

The rsi chart shows the price as oversold, but it would be a bold person looking for a short term trade with all the political manouvering going on in respect of NBN roll out and the ACCC giving tls a hard time with land line pricing on the now aging copper network.
 

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A telstra story, I'm sure we have them about all communication companies.
About a month ago, a chap called to our house offering telstra bundle deals, I was interested as my fixed line, internet, and mobile was with 3 different providers.
Sat down for about an hour, and settled on a deal to connect all with telstra, my mobile had been with them on a month by month basis..

I explained to the chap that I ran business sometimes from home and that I had a fax and phone on the same line with a duet number, and regardless of what offer he came up with that it was essential that I keep this arrangement , he assured me there was no problem and rang his boss to confirm that I could keep the separate numbers as part of the new deal.
$ 80 per month was for line rental, so much free calls, and 100 gb per month on broadband with free connection...To be honest I'm not very tech wise these days, and whether this was a good deal or not, I'm not sure , but it was way better than what I had before by about $30 a month..
Either ways I was happy enough to have everything on the one bill.
At the same time he offered me a deal on a new I phone if I signed for 24 month on a $40 plan, and I had to pay an extra something like $60, because it was an I phone, this I didn't mind as it included net time on the phone, and also my old phone had just about done it's time , I had it for about 5 years...
Signed all the paperwork, and was advised that there was a 10 day cooling off period.
I hadn't heard from anyone from Telstra for a month and was just about to call them as I had cancelled my net connection , when I got a call from them, the guy advised me that the bundle deal could not go ahead because of the fax and phone being on the one line, I explained to him that this had all been covered when I signed the contract, he said there was nothing he could do, except apologise for the miss information that I'd been fed.
I did say to him that this was a legal contract that I had signed, and that I expected Telstra to uphold their end, but he said that there was nothing he could do.....
So I then asked about the mobile phone deal, and he said that this contract couldn't be honoured either as the I phone was only to be offered to new customers, I explained to him that I had gone through this with the guy doing the sales and that he once again had contacted his boss to clear everything, It was agreed that because I was on a month by month deal with Telstra, that technically I would be a new customer if I cancelled my current arrangement immediately, but this they decided wasn't necessary....
In the end I was so annoyed, that I told the guy to forget the whole deal and that f***ING Telstra had lost me for good....
The thing that really annoys me is if the boot was on the other foot and I had something like a 24 month contract with Telstra and hadn't paid my bill, there would be all sorts of letters ariving in my post box threatening legal action, I just can't be bothered

So I'm back to square one, Does anyone here know of a communications company that can deliver a bundle including broadband 100 gig / month, mobile phone, fixed line with duet capability to run the fax, on one bill at a fair price..???

Joe..
 
Nulla Nulla, You are right that everytime it approaches 2.70, it weakens back down. It has been weak for too long now. What is causing this extended weakness? There is something going on. It is the future fund drip feeding its selling into the system. Everytime it strengthens a little up to 2.70, 2.71 or even 2.68, the fund comes in and does its thing. Thats why the dog is struggling so hard. Up days have become really rare, even 2-3 cents is hard to come. As soon as the future fund backs off, we end up with a small up day. The fund then takes advantage and when nobody is looking, starts pushing in more sells. The funds holding was reported to be 10.6% (pre 19 October), then 10.0 and now just recently, 9.88% (now). Why the hell are you selling now Future Fund? Back off for now and let the thing recover before you push it in more. And if you know something us folk don't know, then tell us and we will sell too. Whats happened and is happening with this stock and to all its shareholders is completely unjust. The stock is copping pressure from a number of sources, all over-very extraordinary. There are people with poor abilities running the country and the company. Fix some of the contributing uncertainties for f**** sakes and do it in 7 weeks not 2 years. NBN and Conroy is crying and wants Telstra infrustructure, pay well for it punk (15B) and do the deal (2 weeks), if you don't want to pay, back off and lay off the company. The Future fund over hang is a problem, who the hell messed up they anyway? get rid of it by some well thought out arrangement (2 weeks). Telstra not customer friendly and doesn't offer plans like others, are you mad? fix it right away (3 weeks). Conroy, do you have a confidence problem where you must prove yourself and show that you can be successful in life? Go and show your skills elsewhere. Learn how to restore cars or something. Drop this communications portfolio thing. It will be an interesting AGM on Friday.
 
alexandro said:
Nulla Nulla, The fund then takes advantage and when nobody is looking, starts pushing in more sells.
Click to expand...
"When nobody is looking?....."

Are you even remotely serious? The job of the Future Fund is to make money for itself, not at all to act as a benevolent society for TLS shareholders who should have exited some time ago on a price action basis.

Unjust? What makes you think it's the duty of anyone other than yourself to look after your own interests?
 
Julia said:
Are you even remotely serious? The job of the Future Fund is to make money for itself, not at all to act as a benevolent society for TLS shareholders who should have exited some time ago on a price action basis.
Click to expand...

Agree Julia, if these people who call themselves Telstra investors actually took a leaf out of the Future Fund book then they too would be out of there.

Here are four profit figures...
FY 2005 - $4.31 billion
FY 2006 - $3.18 billion
FY 2009 - $4.07 billion
FY 2010 - $3.88 billion

The thing has a decreasing profit scale and that is after it has been handed a taxpayer built infrastructure.

Which direction do you think their share price should go each year alexandro (not which way would you like it to go) ?
 
For what it is worth here is a link to the Future funds charter:

http://www.futurefund.gov.au/__data...ment_of_Investment_Policies_Sept_16_FINAL.pdf

The following is an extract of how it is required to deal with the Telstra holding:

3.5. Telstra Shareholding
Following the Telstra 3 share offer and the transfer of the Australian Government’s
remaining shares, the Fund received approximately 2.1 billion shares in Telstra
Corporation Limited (Telstra). A set of Ministerial Directions relating to this holding
was issued on 28 February 2007. These Directions placed the shares under escrow,
subject to limited exceptions, until 20 November 2008.
The Board has managed the holding in line with the Ministerial Directions, its broader
Investment Mandate and the Act. Following the disposal of some 126 million shares
(as permitted under the Ministerial Directions) and a small further transfer of shares
from Government, the Board’s holding totalled approximately two billion shares in
November 2008.
With the expiry of the escrow period, the Board expects to reduce its holding over
the medium term with a view to maximising long term value with acceptable risk
while avoiding causing abnormal volatility in the market. Specifically, the Board will
manage the holding in a manner that:
• is consistent with the legislation and Investment Mandate;
• gives consideration, if appropriate to the rights attaching to the shares;
• takes into account the Board’s view of Telstra’s performance and prospects;
and
• reflects the market and other considerations prevailing from time to time.

The Future Fund holding of Telstra shares is still an overhang, even though they have reduced it. Unfortunately every time they unload a significant parcel, to move their investment elsewhere, it will have a negative impact on the share price.
The new telstra boss appears to be trying to make the company more competitive, customer orientated and come out on top of the NBN deal (if it happens). With the revised approach to new products and competitiveness, the ultimate winners will be the consumers regardless of who their carrier is.
 


Actually if you look at the results for the last 5 years, they have continued to grow the profit with the exception of the last result compared to the previous year. I haven't delved into the impact of extraordinary items (sale of assets at profit or loss and/or write down of assets). But if you were to compare price/earnings ratio's with other top 100 companies, tls would still come up favourably. Their real problem at present is market perception as to their competitiveness and future profitability.

This is a summary of Telstra's last five financial years.

2010$m 2009$m 2008$m 2007$m 2006$m

Sales revenue 24,813 25,371 24,657 23,673 22,712
EBITDA(1) 10,847 10,948 10,416 9,861 9,575
EBIT(2) 6,501 6,558 6,226 5,779 5,497
Profit before
income tax expense 5,538 5,658 5,140 4,692 4,564
Profit for the year
after non-controlling
interests 3,940 4,076 3,711 3,275 3,183
Dividends declared
for the fiscal year(3) 3,474 3,474 3,476 3,479 4,224
Dividends declared
per share (cps) 28.0 28.0 28.0 28.0 34.0
Total assets 39,282 39,962 37,921 37,837 36,208
Gross debt 16,031 17,036 16,285 15,547 13,792
Net debt 13,926 15,655 15,386 14,724 13,102
Equity 13,008 12,681 12,245 12,580 12,834
Accrued Capital
expenditure 3,471 4,598 4,897 5,879 4,479
Free cash flow 6,225 4,365 3,855 2,899 4,579


Additionally, if you were a long term investor (rather than a short term trader) and you were confident that tls would maintain the dividend at $0.28cps fully franked, you could easily justify leveraging a large investment where the finance costs were well and truly offset by the dividend income.

Sorry but it doesn't seem to matter how I align the above information it doesn't hold the column allignment when it is saved. The link follows:

http://www.telstra.com.au/abouttelstra/investor/financial-information/financial-summary/index.htm
 
nulla nulla said:
But if you were to compare price/earnings ratio's with other top 100 companies, tls would still come up favourably.
Click to expand...

The problem is that when a company becomes one of the top 100 then its real profit making race is run, the average sum result of all of the top 100 is just a bit better than holding cash.
According to Alan Kohler the ASX200 only just performs better than the cash rate.

The stocks to be investing in are tomorrow's top 100.

Piccy below if from that TLS link nulla, I have highlighted an area of it.
Below that are pics of similiar data for JBH and MND for comparison.

Those who apply fundamental analysis and see TLS as a keeper, am I missing something here.

(click to expand)
 

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Boggo, Here are the profit figures you present (and a few more for years in between that I have included) and the share price at the time. Looking at it, I think (not like for it to go) the share price should have gone each year in a direction that is certainly not in the direction it has taken. Profits in 2006 and 2007 were much lower than 2010 but share price much higher. So by presenting me with past profits and asking me where I expected the share price to go is suggesting that I should have known. Not one analyst knew and I could not have known. Looking at the numbers, you could say the share price should be anywhere between 2.96 and 4.35. I can't be and no shareholder can be blamed for not seeing it coming according to the profit numbers. Clearly the current share price of 2.60 is not as a result of past, present or 2011 profits. It is as a result of fear, uncertainty and sentiment. What is causing this fear? The items I mentioned in my previous post. The threat by Conroy to split a private company, the Future Fund over hang and not the best management (although I have respect for Thodey) and more.

year net profit share price at the time
2005 4.31 4.58
2006 3.18 3.50
2007 3.25 4.24
2008 3.69 4.35
2009 4.07 3.47
2010 3.88 2.96
2011 3.20 2.60
 
alexandro said:
Not one analyst knew and I could not have known.
Click to expand...

As Kerry Packer said "if an analyst appears on the BRW top 100 I may start to take him seriously".

All I am trying to establish is whether you guys want to make money or pay a price so you can say you are Telstra investors.

If you want to make money from a fundamental approach then subscribe to StockDoctor and invest in their emerging Star Stocks which is where the likes of JBH, SUL, EQN and MND just to mention a few were years ago.
(Pic below of some of their stocks that are still going well and still have good fundamentals)
Most 'investors' would never have heard of half of these !

If you are sitting around watching your money go down the gurgler while waiting for a Labour politician or Greens policy to save the day then good luck.

Just my
 

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Thanks Boggo, what codes did you use to post the tls table? Thanks Boggo, what codes did you use to post the tls table? (Had to make up the 75 required letters)
 
I just rang up Telstra (Bigpond) 1 hour ago. This is my experience....

The call was a billing inquiry... call was answered in 10 seconds. The guy on the other end was very helpful. Problem was solved in 2 minutes and logged. I rated his call effective and high quality...

Excellent service again Telstra.. I just came back from my girlfriend's uncles place and he just switched everything to Telstra/Bigpond and loves the service and its cheap!

Let's hope the NBN is done quickly to get the price above $3 again.

PS: Cant wait to signup my new mobile plan with them to save more money

Vodafone can die.
 
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