In the spirit of where to now for Telstra, thought I would list my “bull” points for Telstra:
Anyone that has read any of my previous posts will realise I am not a fan of Penn but he won’t be there forever. My view is he will see T22 out and then go.
bad decisions have been made in the past but I think they are now mostly exposed. (for example, Foxtel has been written down to almost zero and so will have less of a negative impact going forward)
the nbn is almost done. The adverse impact on earnings is almost at an end.
dividends will be supported by cash flow for the next couple of years and then by revenue and margin growth
infraco will be demerged and then both Infraco and Telstra will be re-rated. Infraco will be a dividend stock and Telstra will be a growth stock
Under new leadership Telstra will leverage its massive customer base
nbn margins will improve at some point
Telstra’s 5g network is the best we have in Australia and that will be leveraged
covid will have a lasting impact on demand for “working from home” technology. Also the negative impacts such as reduced revenue from overseas roaming will eventually dissipate
Telstra’s terrible messaging app will improve over time and lead to lower cost base (my recent experiences with it have been shocking)
every now and then a “diamond” will emerge from Telstra ventures
internet of things will provide opportunities
I firmly believe there is limited downside but substantial upside from here
Now for the ”Bear” points
i have been wrong up until now!!
in the interests of disclosure, I have held Telstra since it was privatised and have steadily increased my holding ever since. Whilst I m showing a capital loss, when I take the dividends into account, the total return has been better than bank interest over that time even if I was to crystallise all my capital losses. It certainly hasn’t been my best performer but it hasn’t been my worst performer either
I continue to live in hope
TLS Price at posting:
$2.85 Sentiment: Hold Disclosure: Held
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