For the last 9-10 years or there abouts this company has done...

For the last 9-10 years or there abouts this company has done nothing to increase the intrinsic value for shareholders.If you go back and look at the numbers for the last 5-10 year period on the annual reports then one must agree that there's no supporting evidence for the shares to be trading anywhere near the $7-8 level 10 years ago and for that matter $4-5 level the past 2-3 years.

The share price at 2000/01 levels were always much much higher than the true worth of Telstra.I understand the market is irrational most of the time but finally after 10 years they figured it out.Goes to show that the market is a casino in the short term and a weighing machine in the long run.

This is a utility that can't expand therefore has no real choice but to pay out all it's profits.The yield seems ok for those buying at these levels but still wouldn't touch this stock with a 10 foot pole as firstly i cant picture where telstra might be in 10-15 years time and even though the cash flows are strong i don't like the junk they have on their balance sheet i.e. goodwill,intangibles are on the up and gearing levels are to high to be serious enough to invest your life savings into this stock.

The shares might drop a bit more or they might rally. Who knows?? what they'll do in the next week or even months but the market has got the value approximately right or close to what i would by the business for today.

Below is my calculations on the numbers for telstra over the 10 year period and where the shares roughly traded at.

Happy to share my valuation for this company and others as well but won't reveal my methods in detail. Hope this helps paint a picture for those who are still not sure what the business is really worth or should i say imho an estimate of what Telstra was worth 10 years ago compared to now and the various trading ranges over the 10 year period.


Telstra: TLS

Year

2000:Trading Range $7-$8.Intrinsic Value = $3.30

2001:Trading Range $5.50 -$7.00.Intrinsic Value =$4.00

2002:Trading Range $4.50-$5.50.Intrinsic Value = $3.75

2003:Trading Range $4.50 -$5.Intrinsic Value =$3.40

2004:Trading Range $4.50 -$5.Intrinsic Value = $3.70

2005:Trading Range $3.80 -$5.00.Intrinsic Value =$3.05

2006:Trading Range $3.80 -$4.Intrinsic Value = $2.20

2007:Trading Range $4 -$4.80.Intrinsic Value =$2.25

2008:Trading Range $3.70-$4.50.Intrinsic Value = $2.60

2009:Trading Range $3.15 -$3.80.Intrinsic Value =$2.85

2010:Trading Range $2.90-$3.40.Intrinsic Value = $3.00