CNU - Chorus

[Zeitgeist]

In line with my previous post, I'm optimistic the Government's review of the Telco Act will trump ComCom's regulated pricing regime. However, there is a risk it won't and a smaller risk that it does but it is worse than ComCom's regulated pricing!

This is now an excellent income purchase. However, if you are looking for capital growth, I can think of several better options. These regulated companies are a different kettle of fish. What you think would be better-than-bank-account yields with capital preservation turn into huge regulatory risks with capital deterioration! (Not that I blame ComCom. I think they have a very tough job to do).

Before any new shareholders go long in CNU, make sure you're satisfied you can tolerate these regulatory risks.

[tosspot]

has anyone got dates for CNU upcoming events like comcom decision or next step in process and earnings dates of the top of their heads

[Poet]

I'm holding and I think will unfold as follows

ComCom will come out with final decision August which will probably make some concessions to Chorus's arguments - so maybe when implemented might be $100m off EBITDA. Current legislative framework has this taking effect from Dec 2014

Before then government will extend the implementation date to say Dec 2015

So for an investor, you get 25.5c p.a tax paid for the next three years - around 13% pre tax yield on current price.

If Chorus hasn't migrated a significant nummber of customers on to fibre by Dec 2015 then the reduction in EBITDA will start to bite.

I think good value for longer term holders at current prices and certainly room to see it at $3.50 if regulatory environment stays benign until end 2015

DYOR of course, but I'll stay the course

[bung5]

With the ex dividend recently been and the uncertainty until august I will be waiting until late July to see where the SP goes. Looks good entry at the moment but with it down trending at the moment better to wait out and see where it goes .

[glasszon]

Lots of sellers on the market now, could get quite ugly.

[The BOWMAN]

Chorus is also facing the risk of much larger cost overrun with the UFB deployment project though. Remember the issues with the XT network? I am expecting lots of delays and glitches from UFB. There will be plenty of negative news until it stabilizes.

[JayRiggs]

CNU dividend is paid out tomorrow. I think it'll go down further tomorrow onwards when some people will want to sell their allocated DRP units.

[JayRiggs]

It's already ex div though isnt it?

Yeah it went ex-div on 26th March and dividend is paid out 12th April.
But for people on DRP, they get their shares tomorrow, so they wouldn't be able to sell out of those until tomorrow.

I've seen it happen in the past for some other shares that do DRP like FPH, where it gets a wee bit of a sell off when DRP units are allocated.

Share dillution in general I guess.

[macduffy]

It seems a bit pointless to take shares in a DRP, rather than the cash dividend, and then incur brokerage to sell the shares, particularly when the timing requires opting for the DRP before you see how the SP performs ex div. I know it does happen though.

I have a DRP in place for a few holdings but only where I'm particularly confident about a company and anticipate a nice compounding effect over time!

[777]

You can also sell an approximate number of expected DRP shares from your initial holding earlier and then just replace them with the DRP shares on payment date.

Don't the receipt of them tomorrow will drive the market down.

IMO of course.