New Zealand’s economy is facing challenges, with recessionary...

New Zealand’s economy is facing challenges, with recessionary pressures, record-high emigration, and lower net immigration compared to previous years—though still positive. Economic growth forecasts remain weak.In this environment, SPK stands out as a potential recession-resilient play, given the essential nature of communications but comes with maybe too much risk.

I recently invested with an income focus rather than growth in SPK. Notably, recent reports indicate a shift in subscribers toward lower-priced plans.Looking ahead, there are interesting trends to consider. The increasing number of extra SIMs per person—driven by modern cars shipping with built-in SIMs and vehicle camera/security systems requiring SIM support for example—could boost earnings. Additionally, if capital can be raised, there may still be opportunities for growth in the data center space. There are 54 datacenters in NZ which roughly aligns per person with Australia. However, data housing/processing requirements will continue to grow beyond your wildest imagination globally so there will be demand. There is the potential for the NZD to fall further against the AUD but bought SPK recently on the bounce.

So all in all, it could be 5 years before investors see any turn around in revenue growth and a long road of investment. If you are buying for income and long term, any dip might present an opportunity. If we cut yield in half it still looks attractive from an income perspective.