TLS - Telstra Corporation

Boggo said:

And very predictable too sometimes, price just hit 2.87, a potential support area around 2.86 to 2.87.

2.83 to 2.80 is a possible next hesitation/stop if this does not hold, one step at a time.

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My random prediction of the day...

TLS falling back down and lingers around $2.8, until early Aug when people start to pile in for the dividend prospect again...

I agree skc.

Its the old saying by the rumour sell the fact. I think too many temporary buyers dived in expecting more buyers once the deal was sealed and they didn't materialise.

Good buy if you need the dividends, this also goes with Mortgage Choice which has also fallen back.

Knobby22 said:

Good buy if you need the dividends, this also goes with Mortgage Choice which has also fallen back.

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LOL well I guess I won't bother buying, I don't need any dividends

Just a thought, but why would you want to buy a stock that's subject to such heavy-handed political interference as TLS has had to contend with?

Oh, I see, it's the yield!

I've got bids in at $2.85 and $2.79. Market is driven by sentiment and doesn't know what it wants. Brokers previously rated tls at $2.90. The yield on $2.80 is 10% plus franking. If I get set I will see if I can ride it for the divs and (hopefully) a run up over $3.36.

I just do not understand why people stuff around with this stock (other than a quick short when everyone expects it to go up).

Buy a few instalment warrants for half the price of the share a month or so before TLS goes ex, collect the dividend x 2, sell asap and watch the 'investors' wonder why its falling again after the 'run up'.

Oh, and have a read of this TLS - the facts

oldblue said:

Just a thought, but why would you want to buy a stock that's subject to such heavy-handed political interference as TLS has had to contend with?

Oh, I see, it's the yield!

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One of the big problems with TLS is that people have a memory, so many seem to only want to see what was and not what is, what's possible...i predicted the turn around back in Sept and was pretty much right.

So_Cynical said:

(28th-September-2010)
I cant help but think that for someone looking at Telstra for the first time (an outsider) could possibly see some potential for a bottom and a contrarian, great turn around story in the making....a Telco giant on the brink of a comeback.

Apparently, according to a recent thread...there's some money to be made being contrarian.

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The NBN changes everything for Telstra...its a company transformer.

So_Cynical said:

...i predicted the turn around back in Sept and was pretty much right.

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You're joking right

What turn around, its lowest point in Sept was 2.62, its now on 2.88.
That's $0.26 in eight months = 3.25c per month.

Have a look at what the likes of ASL, ILU and numerous others have done over a similiar time period.

I think its a great company if you are retired or reasonably low income and want a safe way to invest your cash at better than bank rates.

The argument that you shouldn't invest because of government interference works both ways. Now we know what the NBN deal is that creates a stabler price.

Sure its not a great capital gain stoc and lousy for traders and high income earners but for the right people its preety good. I don't own any as it doesn't suit my needs but I would if my circumstances were different.

Knobby22 said:

I think its a great company if you are retired or reasonably low income and want a safe way to invest your cash at better than bank rates.

The argument that you shouldn't invest because of government interference works both ways. Now we know what the NBN deal is that creates a stabler price.

Sure its not a great capital gain stoc and lousy for traders and high income earners but for the right people its preety good. I don't own any as it doesn't suit my needs but I would if my circumstances were different.

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FWIW a glance at a chart shows TLS to be one of the slowest stage 5 disasters ever witnessed so dont be mistaken . as an investment its total sh!te but for a short term trade every now and then for some div skimming it is pretty predictable and easy ...............

ginar said:

FWIW a glance at a chart shows TLS to be one of the slowest stage 5 disasters ever witnessed so dont be mistaken . as an investment its total sh!te but for a short term trade every now and then for some div skimming it is pretty predictable and easy ...............

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Completely depends on when you bought in, if you bought in at $6 yes it's a disaster and a 'serial wealth destroyer' as it has been described. But it's pretty hard to see much further downside if you get in at say $2.80 and the dividend return at that price is huge.

poverty said:

Completely depends on when you bought in, if you bought in at $6 yes it's a disaster and a 'serial wealth destroyer' as it has been described. But it's pretty hard to see much further downside if you get in at say $2.80 and the dividend return at that price is huge.

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the thing is people were saying the same thing at 4.50 , 4.00 , 3.50 , 3.00 etc . now at 2.80 as a long term investemnt how long do you really think this yield can be maintained .... ill give you a hint , declining revenues on declining margins with a payout ratio that averages over 100% last 5 years . sustainable ?? you tell me


Company Historicals
PER SHARE STATISTICS
6/01 6/02 6/03 6/04 6/05 6/06 6/07 6/08 6/09 6/10
Sales($) 1.45 1.57 1.60 1.65 1.78 1.84 1.91 2.00 2.06 2.01
Cash Flow(cents) 51.3 55.2 54.8 58.4 65.2 69.2 68.6 71.4 72.8 78.1
Earnings(cents) 34.6 28.4 35.2 32.6 34.8 25.7 26.2 29.8 32.9 31.3
Dividends(cents) 19.0 22.0 27.0 26.0 40.0 34.0 28.0 28.0 28.0 28.0
Franking(%) 100 100 100 100 100 100 100 100 100 100
Capital Spending(cents) -34.0 -27.1 -25.3 -23.7 -28.3 -34.4 -45.5 -43.0 -38.8 -29.0
Book Value($) 1.03 1.10 1.20 1.22 1.20 1.01 0.99 0.97 1.00 1.02
Shares Outstanding(m) 12,866 12,866 12,866 12,628 12,443 12,443 12,443 12,443 12,443 12,443
Avge annual PE ratio 19.0 18.1 12.9 14.6 14.2 16.0 15.8 15.3 11.5 10.4
Relative P/E(%) 142.2 130.3 97.4 103.4 97.3 116.6 108.0 100.0 108.0 78.6
Total Return(%) -18.3 -9.8 0.2 20.6 7.5 -19.7 33.8 -1.6 -13.9 4.7
+/- Market(%) -27.2 -5.2 1.3 -1.8 -17.3 -44.0 3.5 10.5 8.3 -9.1
+/- ASX sector(%) -- -- -- -- -- -- -- -- -- --




HISTORICAL FINANCIALS
6/01 6/02 6/03 6/04 6/05 6/06 6/07 6/08 6/09 6/10
Revenues ($million) 18,718 20,240 20,528 20,950 22,257 22,772 23,709 24,834 25,514 24,967
Operating margin(%) 55.8 46.8 50.0 49.2 47.9 42.1 41.6 41.9 42.9 43.4
Depreciation ($million) -2,386 -2,612 -2,703 -2,873 -2,946 -3,183 -3,344 -3,486 -3,624 -3,440
Amortisation ($million) -485 -655 -744 -742 -820 -904 -738 -704 -766 -906
Net profit before abnormals ($million) 4,453 3,656 4,528 4,154 4,349 3,181 3,253 3,692 4,073 3,883
Net profit ($million) 4,058 3,661 3,429 4,118 4,447 3,181 3,253 3,692 4,073 3,883
Income tax rate(%) 35.5 33.0 31.1 29.6 29.1 30.3 30.2 27.8 28.0 28.9
Net profit margin(%) 23.8 18.1 22.1 19.8 19.5 14.0 13.7 14.9 16.0 15.6
Employees (thousands) 44.9 40.4 42.1 78.1 46.3 49.4 47.8 46.6 43.2 45.2
Long term debt ($million) 11,386 11,860 10,806 9,014 11,816 11,409 11,619 13,444 15,344 12,370
Shareholders equity ($million) 13,239 14,108 15,420 15,359 14,879 12,586 12,329 12,017 12,418 12,696
Return on capital(%) 20 16 20 19 18 16 17 18 17 18
Return on equity(%) 33.6 25.9 29.4 27.0 29.2 25.3 26.4 30.7 32.8 30.6
Payout ratio(%) 55 77 77 80 115 132 107 94 85 89

forecast earnings lower than supposed div

I have some macq analysis that paints bleaker picture into 2014 with declining divs forecast , cant really post that here as its pdf


FORECAST EARNINGS TREND DETAILS
Year Ending 30-06-11 --------- Year Ending 30-06-12
EPS(c) PE Growth --------- EPS(c) PE Growth
Median 24.3 11.8 -22.3% 27.9 10.3 14.6%
High 26.1 11.0 -16.7% 29.6 9.7 13.6%
Low 23.0 12.5 -26.4% 26.9 10.7 16.7%
30 Days Ago 24.2 27.6
60 Days Ago 24.2 27.6
90 Days Ago 24.1 26.9

Number of Analyst
Estimates 5 5

ginar said:

the thing is people were saying the same thing at 4.50 , 4.00 , 3.50 , 3.00 etc .

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Exactly.

Boggo said:

You're joking right

What turn around, its lowest point in Sept was 2.62, its now on 2.88.
That's $0.26 in eight months = 3.25c per month.

Have a look at what the likes of ASL, ILU and numerous others have done over a similar time period.

Click to expand...

You didn't include the last dividend and credits 18.2 CPS and your selectively quoting Fridays close...personally i have a 100% record of NOT selling at low points so the $2.90 > $3 range is more realistic....i called a bottom (broadly) Sept/Oct/Nov 2010 and anyone that did buy at the low points over that period would be doing fine right now...and IMO opinion will continue to do so.

44.2 CPS (gross) in 8 months (16.8% approx) is a brilliant return and at the lower end of the range, smarter punters could of easily got 20%+....and lets leave ILU outa this, im still kicking myself that i only made 265%+
~

ginar said:

FWIW a glance at a chart shows TLS to be one of the slowest stage 5 disasters ever witnessed so dont be mistaken . as an investment its total sh!te but for a short term trade every now and then for some div skimming it is pretty predictable and easy ...............

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Total sh!te is a bit harsh given the price it can be bought for today. Up until the last 6 months though.. fair call.

Boggo said:

You're joking right

What turn around, its lowest point in Sept was 2.62, its now on 2.88.
That's $0.26 in eight months = 3.25c per month.

Have a look at what the likes of ASL, ILU and numerous others have done over a similiar time period.

Click to expand...

So_Cynical said:

You didn't include the last dividend and credits 18.2 CPS and your selectively quoting Fridays close...personally i have a 100% record of NOT selling at low points so the $2.90 > $3 range is more realistic....i called a bottom (broadly) Sept/Oct/Nov 2010 and anyone that did buy at the low points over that period would be doing fine right now...and IMO opinion will continue to do so.

44.2 CPS (gross) in 8 months (16.8% approx) is a brilliant return and at the lower end of the range, smarter punters could of easily got 20%+....and lets leave ILU outa this, im still kicking myself that i only made 265%+
~

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I aggree with So C,

I have been selling (writting) Puts against this stock all year and so far it's been a cash cow.

Gee Boggo, if your not happy with a 10% cap gain along with a yield of over 12%pa your a hard man to please.

Tysonboss1 said:

Gee Boggo, if your not happy with a 10% cap gain along with a yield of over 12%pa your a hard man to please.

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Actually I love that yield, now I just have to do some calcs on which of these I will hold for the next couple of months - TLSIOI, IOP, IOU or IZJ.

It goes up, it goes down and there never seems to be any logic. The recent retrace to $2.86 - $2.87 provided a couple of trade oportunities for the bold. Not me, I have a bid sitting at $2.85 and the closest the action got to me was 3.2 million shares in front of me when it hit $2.86. The chart looks lke it is forming a pennant with a potential break out (upwards action).

Looks like it really needs the xao to turn upwards and have some more positive news on NBN. Otherwise I can't see it going anywhere while the xao continues to experience a 2 speed bear dominated environment.

nulla nulla said:

It goes up, it goes down and there never seems to be any logic. The recent retrace to $2.86 - $2.87 provided a couple of trade oportunities for the bold. Not me, I have a bid sitting at $2.85 and the closest the action got to me was 3.2 million shares in front of me when it hit $2.86. The chart looks lke it is forming a pennant with a potential break out (upwards action).

Looks like it really needs the xao to turn upwards and have some more positive news on NBN. Otherwise I can't see it going anywhere while the xao continues to experience a 2 speed bear dominated environment.

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Agree nulla, you would be brave to go long atm, no matter what the chart tells you, the downside risk is too great, you could be lucky , but the way this bugger gaps down there is no guarantee you could have your stop honoured.

I haven't looked at volume recently. Does this point to a break to the up?

gg