TEL v TLS

[Gryffyn]

wot if it was in their cricket team?

[fish]

exactly

[Lawso]

quote: TEL is grossly undervalued
As a rule of thumb i dont see if u value a stock approx 2% less than div yield of present and future exectations U cant go wrong .

Sorry, fish, but I don't follow. Can you explain for a thicko like me. Using, say TEL's gross div of 47.01c on Friday's closing price of 628 = yield of 7.49%. So if you go 2% below that, what is that telling you? What do you do next?

[fish]

Lawso
My fault for not explaining a very simple method to put a value on a utility stock .
Compare it to a bank deposit-there is increased risk of losing capital in the utility stock but this is more than compensated by the likelyhood that the capital value invested in the stock over a long period will grow .However inflation will surely erode the value of the capital invested in the bank deposit at a current rate of around 2%.
Therefore if a utility stock yields 2% less than a bank deposit but the value of the stock grows by the rate of inflation at the end of an average year the investments would be of equal value .
I know this is simplistic but it does show how an ivestor is more likely to make money investing in telecom than fixed interest.

using the above logic if fixed interest rate is 6% this would be equivalent to tel yielding 4%-
Therefore i believe the true value of telecom should be around $12-which would give a yield of 4%.
Given the choice of investing in tel at say $6.50 or fixed interest this should be a no brainer for anyone who wants to see their money grow.
TLS is a lot trickier to value with exchange rate risks and tax credit factors to build in-plus what will happen to the market when its flooded by the govt selling of its shares-do you trust the aussies to play fair ?

[Gryffyn]

8/02/05

Shr Open Clse Divds Diff. Cumulative
------------------------------------
TEL 6.32 6.30 00.00 -0.02 +0.12
TLS 5.60 5.71 00.00 +0.11 +0.36

[Gryffyn]

9/02/05

Shr Open Clse Divds Diff. Cumulative
------------------------------------
TEL 6.30 6.37 00.00 +0.07 +0.19
TLS 5.71 5.70 00.00 -0.01 +0.35

[Gryffyn]

10/02/05

Shr Open Clse Divds Diff. Cumulative
------------------------------------
TEL 6.37 6.35 00.00 -0.02 +0.17
TLS 5.70 5.79 00.00 +0.09 +0.44

[spector]

If it's any help to anyone... I know through a friend at Vodaphone that last month was the first time that Telecom got more new cellphone customers than Vodaphone... which is very worrying for Vodaphone. By far the majority of telecoms current profit is now coming through broadband internet and cellular phones.

[Gryffyn]

current profit or growth? are you saying that cellphones and broadband outweigh all tolls, business data circuits, home lines etc?

[spector]

quote:Originally posted by Gryffyn

current profit or growth? are you saying that cellphones and broadband outweigh all tolls, business data circuits, home lines etc?

talking about cream profit.... the margins on broadband/cellular are much much higher than the margins on tolls etc.... that's why telecom and vodaphone resist unbundling so much.