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Is Telstra (finally) cheap?

30102017 TLS

Is Telstra (finally) cheap?

Only 12 months back, Telstra (ASX: TLS) shares were trading at around $5.00. The fall since then has been precipitous. Which has got a lot of investors asking: does it finally represent good value?

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Tim joined Montgomery as Head of Research and Portfolio Manager of The Montgomery Fund in July 2012. Prior to this, Tim was an Executive Director in the corporate advisory division of Gresham Partners, where he worked for 17 years. Before joining Gresham Partners, Tim worked for McKinsey & Company for four years, where he was involved in strategic consulting in both Australia and Denmark.

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.

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3 Comments

  1. Tim, you have the beginnings of an interesting study. However, I feel to be useful, one needs to study the qualitatives (as a minimum) and quantitatives of some others you have listed. SCG (the top performer) is one that has dropped over 20% since its high in July last year but sports a div of over 5% with minimal franking. So why are those institutions supporting SCG? One may expect too much from following this study? Are you running with the herd?

  2. Tim
    Many Thanks for your above article.
    Wondering if you have reviewed the valuation on Telstra and whether you would call it a buy now-?compelling valuation since this article was written.

  3. Tim, you might make also draw the conclusion that as Telstra has changed its dividend outlook those investors that are currently underinvested (Institutional) may increase their holdings. While I find the low percentage of institutional holders interesting, I am not sure the consequence is clear.

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