TLS - Telstra Corporation

[Muschu]

Me too. However, I saw an article this morning somewhere "Is it time to sell TLS?"

Hi Julia

I twice received a "Mötley Fool" email with this article title today. (Although I am not a subscriber). An attached article, amidst some verbosity, appeared to suggest that the "current" answer is "No". Usual cautious and self-protective additives.

We have held TLS since it was about $3 and certainly do not plan to let it go without good reason.

Rick

 

[MrBurns]

Ok let's have your opinions has TLS topped out or is there more upside ?

 

[Muschu]

Ok let's have your opinions has TLS topped out or is there more upside ?

If you are asking me Mr B, I have no idea.

I'm a retiree with a SMSF. TLS has been offering me excellent returns. Would I ever sell? Of course but see no reason to at this time. I'll just keep observing.

 

[Julia]

Rick, sorry, I missed your earlier post. You'll be even happier with your TLS on the basis of today's rise.

 

[MrBurns]

Rick, sorry, I missed your earlier post. You'll be even happier with your TLS on the basis of today's rise.

If the RBA lower rates to get the dollar down to help business this may just be the start..........I feel like rolling the dice

https://www.aussiestockforums.com/forums/showthread.php?t=26662

 

[Muschu]

Rick, sorry, I missed your earlier post. You'll be even happier with your TLS on the basis of today's rise.

No need to be sorry Julia but certainly TLS has been good value. Just don't put it down to my "astuteness" as I could also refer to several losses. The last several years have been a fascinating ride and it will be no surprise if this continues.

I hope I am not complacent and doubt the ride is done... Volatility has perhaps become "ordinary"....

 

[MrBurns]

No need to be sorry Julia but certainly TLS has been good value. Just don't put it down to my "astuteness" as I could also refer to several losses. The last several years have been a fascinating ride and it will be no surprise if this continues.

I hope I am not complacent and doubt the ride is done... Volatility has perhaps become "ordinary"....

Thanks Rick, I was looking for some analysis that might indicate something, anything to help with the voodoo that I usually go by.

 

[Muschu]

Thanks Rick, I was looking for some analysis that might indicate something, anything to help with the voodoo that I usually go by.

Sorry but I am not up to that level of analysis Mr B. In this instance your voodoo approach may have worked. Please don't transfer this thought into future investment thoughts... Decisions need to be evidenced based - in my view.

 

[Country Lad]

TLS is a good example why valuations are mostly a waste of time and the market determines the price of a share regardless of theoretical valuations. For at least 12 months all the brokers have had valuations on Telstra well below the market price.

All are saying that that there will be no impact on TLS when the coalition wins government. All are saying that their DCF valuation is around the $4 mark and most have a neutral recommendation. Yet the price has kept rising as the market determines its own value.

As talk of further rate cuts continue TLS will remain a popular yield stock, which, along with the Defence contract, I think accounts for its recent price rise. I am happy to hold at this stage.

Cheers
Country Lad

 

[MrBurns]

I am happy to hold at this stage.

Cheers
Country Lad

But are you happy to buy more ?

I see TLS as bullet proof from a number of angles, it's a secure monopoly, even if the market corrects it will come back as it's IT sector is one of infinite growth..........

 

[Country Lad]

But are you happy to buy more ?

I see TLS as bullet proof from a number of angles, it's a secure monopoly, even if the market corrects it will come back as it's IT sector is one of infinite growth..........

No, but that is because I have enough. Everybody is concentrating on the (very little or no) effect a change of government will have. I tend to look more at the changing market. Sure, there will be connections to the NBN or the coalition alternative, and less household fixed phone connections, but in the meantime the real growth is in wireless with all the new smartphones, gadgets and aps. TLS is best placed with their extensive network around the country and the increasing 4G rollout, so I expect them to take advantage of the growth in that lucrative segment of the market.

Cheers
Country Lad

 

[MrBurns]

No, but that is because I have enough. Everybody is concentrating on the (very little or no) effect a change of government will have. I tend to look more at the changing market. Sure, there will be connections to the NBN or the coalition alternative, and less household fixed phone connections, but in the meantime the real growth is in wireless with all the new smartphones, gadgets and aps. TLS is best placed with their extensive network around the country and the increasing 4G rollout, so I expect them to take advantage of the growth in that lucrative segment of the market.

Cheers
Country Lad

Well if they're well placed for wireless I can only see that as rivers of gold, I'm tempted to jump in harder.......however the whole thing is a gamble, for all the professional advice out there no one seems to actually have any reliable answers.

 

[prawn_86]

.......however the whole thing is a gamble, for all the professional advice out there no one seems to actually have any reliable answers.

You go through this over and over every time you are thinking of making an investment decision. Either find an adviser you trust, learn to do it youirself with confidence, or accept that it is just gambling and get on with it rather than umming and ahhing for weeks each time

If someone did have reliable answers then it would be easy wouldnt it.

 

[MrBurns]

You go through this over and over every time you are thinking of making an investment decision. Either find an adviser you trust, learn to do it youirself with confidence, or accept that it is just gambling and get on with it rather than umming and ahhing for weeks each time

If someone did have reliable answers then it would be easy wouldnt it.

So you have no opinion ?, that's what this thread was asking.

 

[prawn_86]

So you have no opinion ?, that's what this thread was asking.

On TLS specifically i would never invest in them because of their management and the way they treat their customers.

Beyond that i have not delved very deeply due to the above fact. Their yield was quite good, and being the dominant player of an oligopoly is always a strong position, however they are exposed to government regulation, like most in a similar positions.

 

[Julia]

TLS is a good example why valuations are mostly a waste of time and the market determines the price of a share regardless of theoretical valuations. For at least 12 months all the brokers have had valuations on Telstra well below the market price.

Yes. Which is why trend followers prefer that price based approach to 'value investing'.

 

[craft]

Ok let's have your opinions has TLS topped out or is there more upside ?

Short to medium term, any business specific matters are going to have little to do with the price. Because of the size and nature of the business – underlying valuation (at a fixed discount rate) changes little and slowly.

What’s driving TLS from a valuation perspective is changes to the discount rate. As alternative investments return less and less – people are willing to drive the price up and yield down on TLS because it’s a perceived better bet than say a term deposit etc.

So if you want to know where TLS is going in the short term, ask yourself where interest rates are going short term.

A complication though is the currency; it may start to fall if the yield differential with other countries is eliminated so you could have a positive for TLS from reduced interest rates and a negative from fleeing international capital.

Ditto the banks and other large yield plays in Aus.

 

[sinner]

IMHO the rise in TLS has very little to do with idiosyncratic risk, probably 95% of the rise in price can be explained by TLS presence on ASX Dividend Yield indices and Global Dividend Yield indices, which have been in high demand since Sep 2011.

i.e. I concur entirely with craft.

 

[MrBurns]

So if you want to know where TLS is going in the short term, ask yourself where interest rates are going short term.

A complication though is the currency; it may start to fall if the yield differential with other countries is eliminated so you could have a positive for TLS from reduced interest rates and a negative from fleeing international capital.

.

I think that's exactly what about to happen, rates will go down to bring the dollar back to help business which is on it's knees, so one will inflate the price the other bring it back again.

Which is the stronger influence ? That will dictate what will happen to the TLS price

 

[Julia]

You go through this over and over every time you are thinking of making an investment decision. Either find an adviser you trust, learn to do it youirself with confidence, or accept that it is just gambling and get on with it rather than umming and ahhing for weeks each time

Is that quite fair? Mr Burns is just being honest enough to express his uncertainty publicly, something I expect many others also feel.

Perhaps consider something you're always promoting, i.e. more comment on stock threads. His questions have provoked responses from multiple other posters. If you only encourage questions and comments from people who are confident about what they're doing, you're going to significantly limit any discussion imo.

(I'm personally appreciative of the input of others on this thread.)