$12, page-9

At first glance, TCL appears to be overvalued. It is currently paying around 4% yield, fully covered by free cash flow. On this kind of stock, I prefer a valuation measure of price to free cash flow (around 28 for FY16 and around 25 for FY17), rather than the usual P/E, as profit is so complex and variable from year to year.

Yet, compared to the current Australian 10 year Government Bond rate of around 2.2% and falling, TCL's return increases each year by around 10% or more. So it is extremely valued by the kind of investors who normally look to invest in bonds, but consider bonds to be unattractive at current prices. While interest rates look like trending down, which they do, TCL is great value even now. This also applies to overseas investors looking for better returns than from bonds.

However, the moment interest rates look like trending up again, I will sell down my TCL to buy it back cheaper later, as it will inevitably respond to higher interest rates by dropping in share price, just as bonds devalue in that environment. This is regardless of how good the underlying business is. So, it is a buy while interest rates are going down, a hold while interest rates are stable, and a sell while interest rates go up.

All my opinion of course.