I agree with most of your points; and my current portfolio reflects my belief that this is as good opportunity as my purchase of BHP and S32 at $0.90 at $15 last year (which paid off handsomely)
However unlike the unexpected mining mini boom happening in mid to late 2016, I do not see fast reversal of fortune with TPG. Mostly because I underestimated how overpriced this stock was in mid 2016.
This stock was priced at around $12 billion in market cap in July 2016. That is with NPAT of merely $376m, P/E ratio of over 31.
Currently this stock is valued at $5.99 billion in March 2017. With expected full year NPAT of around $410m, P/E ratio of around 14.
And we have not even accounted for NBN margin slash.
The levy will kill them if it happens. It will not happen, it is politically unworkable. But to be realistic, $7 levy on ARPU (Average revenue per user) of merely $69 means 10% cut to margin, especially when TPG competitors (wireless) are not taxed.
Corporate business is great, but 50% of the business is still individual.
So if all the growth opportunities you have listed eventuate, AT BEST, it will make NBN slash less painful, but still the drop will be larger than the gain.
TPG is already 2nd largest telecom company, there is a natural limit to how much it will grow; and Singapore is not a solution because the market there is already filled by powerful players. Being 4th best player in a tiny island of 4 million people won't be profitable.
Perception is the issue here. The last results was breaking records. And the stock move 3% after 2 days.
So it is a great, great result - but the optimism is not back yet. Not until NBN transfer is finalized and we can see the NPAT after NBN.
Of course by then, it is too late to get into the bargain (assuming the NPAT is good); or if the NPAT after NBN is bad, then we will look silly (and much poorer) buying today at $7.
Nothing is certain, but I am optimistic the NPAT is not as bad as everyone thinks it is; the problem is I underestimated how expensive the stock was before. It is reasonably priced today, but not even close to be dirt cheap.
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