TLS - Telstra Corporation

[BrightGreenGlow]

I see Telstra gaining marketshare in the next 12 months.. if my little group of friends / family / colleagues reflect the broader picture which it is doing if you have a good at their latest mobile and bundle figures. I just paid Telstra my first ever $59.95 today! I wouldn't mind betting a NBN deal and better than expected profit (read above) is very possible.

 

[drsmith]

Me thinks Mr Market is betting on another profit downgrade at the upcoming AGM.

If Telstra is winning back customers, then, what about the margin ?

 

[malachii]

I think it is probably a pretty safe bet (the downgrade). I cant remember an AGM without one!

malachii

 

[Boggo]

The reality that cannot be ignored, TLS vs ASX200.
At some point I am sure that it will turn around.

(click to expand)

 

[sammy84]

At some point I am sure that it will turn around.

A touch of sarcasm there?
At least it can't go belly up.

 

[Boggo]

A touch of sarcasm there?

It does look like that sammy, it wasn't actually intended that way.

I would hope that it turns around for those that have held on because they listened to advisors or because of an "investment" approach and are willing to learn from the experience.

I think it is going to be a long time before the old style investment approach to making money comes around again, especially with the yanks spending more money on fixing up other countries than their own basket case, the europeans in a "mine is bigger than yours" competition while their economies go down the gurgler and the Chinese putting stop losses in place to save them when the rest fail.

Sure, go into it with an investment approach, but if it is costing you money or is not making money then adopt a technical approach and have an exit strategy.

I am hoping too that most of those who have followed some of the discussion on here are now more aware of the dividend yield trap that is constantly promoted by company boards and advisors.

If the sum total is a reduction in the value of your portfolio - eliminate the lazarus elements.

 

[Trembling Hand]

Sure, go into it with an investment approach, but if it is costing you money or is not making money then adopt a technical approach and have an exit strategy.

I am hoping too that most of those who have followed some of the discussion on here are now more aware of the dividend yield trap that is constantly promoted by company boards and advisors.

If the sum total is a reduction in the value of your portfolio - eliminate the lazarus elements.

Although to be fair to tls punters that chart should include the share price with the divs included. At $0.28 to $0.34 per year it nearly holds its head above water.

 

[Boggo]

Although to be fair to tls punters that chart should include the share price with the divs included. At $0.28 to $0.34 per year it nearly holds its head above water.

A good point TH, the divs should be the icing on the cake, the cake unfortunately has collapsed.

 

[nulla nulla]

tls held up better than I expected today. After some more press in respect of the cost to tls of vodaphones new package, I expected tls to test $2.50.

 

[Bintang]

Although to be fair to tls punters that chart should include the share price with the divs included. At $0.28 to $0.34 per year it nearly holds its head above water.

Trembling Hand, I'm not sure what you mean by 'nearly holds its head above water' so I decided to test the assertion. The attached chart based on my own analysis shows the value today of one dollar invested in Telstra shares at various times since August 2000. It simulates a strategy of buying Telstra shares around one month before each ex-dividend date, which is what some punters might have done based on the usual broker mantra "buy Telstra for the dividend”. It is a cashflow valuation, i.e. cashout is initial share purchase price, cash-in is dividends plus share disposal price at today’s price of $2.56. Punters who bought in 2003 or 2006 might think they have just 'held their heads above water' but that would be on an undiscounted basis. The only thing that really matters is Net Present Value. Throw in a modest discount rate of 5% and it looks to me that on a historical basis punters have been guaranteed to lose an average of around 25 cents for each one dollar invested in Telstra. But maybe history is a bad guide to the future and maybe therefore Telstra is a screaming buy right now and maybe those really are pigs flying past my window.
Disclosure: I bought shares in Telstra when it was floated but off-loaded all of them when the price went over $9.00.

 

[Trembling Hand]

Trembling Hand, I'm not sure what you mean by 'nearly holds its head above water' so I decided to test the assertion.

My point was that since 2000 its lost about $4.50 in share price but its paid about $3.00 in dividends. Therefore the holders of TLS since then are down about $1.50 give or take a lot cus I cannot be bothered checking the actual figures and of course ignoring tax on divs.

But still no matter which way you slice the cake. I'm sure it will still leave a sour taste in ya mouth.

 

[BrightGreenGlow]

The AGM was held today and as I predicted in previous posts their customer base is up a less money will be lost of fixed line and mobile and bundles are on the way up nicely. TLS is currently up 7c. NBN draft hopefully by Christmas and a shareholder vote by mid 2011.

Once again they noted focus on customer service and I agree Telstra customer service is handsdown better than my experience with Optus and Voda.

Well done Telstra

 

[drsmith]

Reading the AGM release I notice this from John Stanhope regarding the NBN negotiations.

We hear a number of observers suggesting that the $11b number is still open to negotiation.

So, let me be clear. As a Board, the approximately $11b is the value we believe is necessary for us to recommend our shareholders vote for our participation in the NBN in preference to other alternatives.

So, yes, it is. The nogotiations may no longer be bare knuckle fisticuffs in the street, but the arm wrestle between Telstra and the government over the final outcome is still very public and very obvious.

 

[McCoy Pauley]

Good work from the Future Fund. Blanket 'no' vote on every resolution put up by the company at the AGM today.

Still holding this stock but it's difficult to maintain any optimism that Thodey and Livingstone can turn this beast around (bigger turning circle than the Queen Mary).

I happen to work in a building which has a Telstra call centre (it's in downtown Melbourne, not downtown Mumbai). The employees at the call centre are by far the dirtiest people in the building. I hope that's not symptomatic of their culture and attitude.

 

[nulla nulla]

Good work from the Future Fund. Blanket 'no' vote on every resolution put up by the company at the AGM today.

Still holding this stock but it's difficult to maintain any optimism that Thodey and Livingstone can turn this beast around (bigger turning circle than the Queen Mary).

I happen to work in a building which has a Telstra call centre (it's in downtown Melbourne, not downtown Mumbai). The employees at the call centre are by far the dirtiest people in the building. I hope that's not symptomatic of their culture and attitude.

If I read the report put out yesterday correctly, the future fund has reduced their holding to 1%. This will go some way to getting rid of the overhang of a large shareholder with such a negative attitude.

 

[drsmith]

The future fund has reduced its holding by 1%. That leaves it with about 10% of something it would prefer to wipe from its bum.

 

[drsmith]

A suggestion for the future fund having had a few beers.

Use a DRP to reduce it's holding by offering existing shareholders the option of shares in leu of dividends (in part or in full). The insto's wouldn't take it up, but a top up plan for small shareholders in addition to the DRP at dividend time might help them offload a few.

Burp!

EDIT: Drink responsibly.

Burp!

 

[BrightGreenGlow]

Telstra up 10/11/12 cents today! Hmmm bit of news on NBN but nothing amazing I can see. Maybe a bit of anticipation? Coming closer to Christmas and a good deal I'd predict?

 

[alexandro]

Commonwealth analyst who a month ago downgraded TLS to a sell, today changed her mind and upgraded TLS to a hold (she couldn't resist the dividend and gave this as the reason). Also, going by the volume, fund managers who hated TLS since August are now starting to like it and going back in causing a swell. The NBN looks stalled, I would have thought this would be negative news. But all up, very amazing what has happened to the share price past 3 days. Good work.

 

[nulla nulla]

JP Morgan have recommended the stock as a "buy" for the first time in six years.. Price target lifted from $3.06 to $3.08 with an "overweight" rating, recommending Telstra should be be a large part of a managed fund. If the deal with NBN gets up they value the share at $3.14.

Sounds good to me, I hold and would love to see it go back over $3.00 in the short term.