When everybody is crying dog and begging people to buy their shares is when people who see the underlying value of the business can come in and make a mint. I read a great article from a broker a while ago that decided to value TLS on the worst possible outcome on all fronts. This included being forced to separate without financial incentive, holding on to the fixed line assets until the NBN was completed including a 10%pa drop in fixed line revenue for the entire time. Based on all that it did not see dividends being reduced and an absolute worst case value target of $2.88. We are already below that and fixed line revenue only dropped 8%, we have an in principle agreement for $11b, cost cutting and staff reductions have been increased.
In short patience is a virtue, it may take a few years to see real share price growth but it will happen because the yeild will not drop, so this is a great long term opportunity. As far as short term trading goes this is way to hard because of the way it's getting kicked around in every direction, i have definately finished even considering shorting this one as there is just way to much upside risk.
TLS Price at posting:
$2.80 Sentiment: LT Buy Disclosure: Held
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