Morningstar have VOC on their 5 best stock selection list, with a fair value of $7.
Their reasoning includes:
* that the fiber business generates margins of greater than 40%
* the fiber generates 20-40% return on capital, depending upon the number of customers they contract to it
* the NBN impact for them will be muted, as only 20% of Vocus broadband customers are "on Net", and therefore directly impacted by the move to NBN
* with just 7% of the current fixed broadband market in Australia, their opportunity is to grow market share as NBN subscribers choose their provider.
As a result of these reasons, they see the gap between market value, and their intrinsic value closing over time (put another way - they expect the share price to rise).
p.s. Crazypunter - this is what analysis looks like.
VOC Price at posting:
$4.23 Sentiment: Hold Disclosure: Held
