Telstra still on hold
It’s hard to get excited about Telstra: three sell-downs of shares by the federal government at $3.30 (T1), $7.40 (T2) and $3.60 (T3) has meant no float participant still holding the shares has made a capital gain yet. If you are after a company whose intrinsic value is rising significantly over the years, neither Telstra’s past nor its future offers much to get excited about, says Roger Montgomery. Read Roger’s article.
Roger Montgomery is the Founder and Chairman of Montgomery Investment Management. Roger has over three decades of experience in funds management and related activities, including equities analysis, equity and derivatives strategy, trading and stockbroking. Prior to establishing Montgomery, Roger held positions at Ord Minnett Jardine Fleming, BT (Australia) Limited and Merrill Lynch.
This post was contributed by a representative of Montgomery Investment Management Pty Limited (AFSL No. 354564). The principal purpose of this post is to provide factual information and not provide financial product advice. Additionally, the information provided is not intended to provide any recommendation or opinion about any financial product. Any commentary and statements of opinion however may contain general advice only that is prepared without taking into account your personal objectives, financial circumstances or needs. Because of this, before acting on any of the information provided, you should always consider its appropriateness in light of your personal objectives, financial circumstances and needs and should consider seeking independent advice from a financial advisor if necessary before making any decisions. This post specifically excludes personal advice.
Glen (Spog) McArdle
:
G’day Roger, I have just finished reading your book and was quite pleased with it. I have also read Ben Graham’s book THE INTELLIGENT INVESTOR and also THE NEW BUFFETTOLOGY by Mary Buffett and David Clark. Both great books. So it was refreshing to read your book because they are all very similar in that you all talk and teach value investing, but we now can read a book written by an Australian for Australian companies and conditions.
I now look forward to your comments in your blog and also your page in the Money Magazine.
Thanks.
Richie
:
Roger, given that I’m a bit of a contrarian, I thought of why telstra would actually be a good investment in these uncertain times
1. I/v and forecasts for most a1s are falling
2. Telstras nbn cash-flow, yield and defensive qualities make it attractive.
3. Competitors mobile services are let’s just say ‘undesirable’
4. Telstra is close to I/v ATM
What I am suggesting is that telstra doesn’t need I/v to grow because the stable yield and stable I/v will give you a 10 percent return year on year
Roger Montgomery
:
Hi Richie,
I don’t disagree. There are however plenty of A1s and A2s now worth looking at too.