SPK- Spark NZ (TELCO)

[bull....]

yep been buying some too on late 25/26 business come back

[Jaa]

It was pretty positive that the 52 week low of $2.85 held last night on close.

Interest rates down today and the spark yield even at a conservative 20 cents a year is double the OCR. Not bad for a utility with the #1 market position and some near monopoly business lines.

[see weed]

It was pretty positive that the 52 week low of $2.85 held last night on close.

Interest rates down today and the spark yield even at a conservative 20 cents a year is double the OCR. Not bad for a utility with the #1 market position and some near monopoly business lines.

I have a funny story to tell about the 2.85 low which I will tell at the stocktalk meeting in Dec. Just thinking would it be a good idea if IFT bought into SPK while the price is low. A good positive close for a change

[Jaa]

Reading the Blackrock disclosure, they sold down 51m Spark shares, mostly between Nov 19-25.

Blackrock are the biggest ETF provider but there are others like Vanguard.

Forced seller.

[Ggcc]

As a non-shareholder yourself, I think you have completely missed the point on how to judge utility type investments. Utilities are not fashion items. Quite the opposite. They are things that are needed through all parts of the business cycle. However, Mr Market does indeed suffer waves of euphoria and depression, that may be unduly affected by 'market events' (e.g index shuffling). So the way to make money on utilities is to buy in times of depression (i.e. right now) and then wait for market conditions to 'return to the norm'. Such a tactic should deliver you a bumper yield on your purchase price when market conditions normalise. The reason I know this tactic is a winning one is that telecommunications in NZ is an oligopoly, with only three core players (Spark, OneNZ and 2degrees). This is why calling Spark a 'no growth' company and saying it should be priced on a comparable multiple to something like a retailer, with the endless competition and survival risk that such an investment entails is 'dreamland investment tactics'. A 'cheap oligopolistic utility investment' exists only in a relative, not an absolute sense. So why do I consider Spark cheap? Perhaps the best answer to that is to bat away some of the views of some of those less well informed commentators out there. Let's begin.....

SNOOPY

I don't have to judge utility type stocks to know where the market is taking Spark in the short term, it has decimated capital from lots of people. I am saying I would not invest in a stock that does not increase their profits over time. Look at TRA one of my biggest assets and another where to put you money, look at Infratil another where to put you money for (Utilities). I would not invest in "One nz" either if it became a float, but joined with Infratil, it gives them cash flow to pay their partially imputed dividends. SPK might do better over time, but we are heading into a tough 2025 for lots of people, which could mean even more cuts by organisations trying to cut costs and a lower share price for SPK. Right now SPK is not worth what people are paying for it and as you mentioned about the, "waves of depression", you are catching the falling knife.

My sister wanted to invest in Spark and I told her don't and that TRA is the better bet and Infratil. So far I am correct. She bought both IFT and TRA, her portfolio is up over 15-20% in just over a month and has two dividends coming in her direction on top. I hope you are right about your tactic to buy more SPK and would love it to work for you, that it rises a lot.

You are a great contributor to this forum and have lots of knowledge to add to many different shares, especially when others like myself don't always understand the numbers game, so please continue being you.

[Snoopy]

Spark has entered into a reseller agreement with Starlink.... might help.

That is the same low orbit satellite outfit that Telstra in Australia use (via SpaceX, i.e. Musk).

SNOOPY

[Snoopy]

I don't have to judge utility type stocks to know where the market is taking Spark in the short term, it has decimated capital from lots of people. I am saying I would not invest in a stock that does not increase their profits over time. Look at TRA one of my biggest assets and another where to put you money, look at Infratil another where to put you money for (Utilities). I would not invest in "One nz" either if it became a float, but joined with Infratil, it gives them cash flow to pay their partially imputed dividends. SPK might do better over time, but we are heading into a tough 2025 for lots of people, which could mean even more cuts by organisations trying to cut costs and a lower share price for SPK. Right now SPK is not worth what people are paying for it and as you mentioned about the, "waves of depression", you are catching the falling knife.

As a fly on the wall in the board room, you have heard Justine open the meeting with the sentence? :
"Right first item on the agenda. We must make sure we make no more money than last year."

That is what you have heard is it? I know you were at that board meeting, because you did hear the other truth about these telecommunications companies:
"it gives cash flow, to pay their partially imputed dividends."

As you know, there are two ways to make money on the sharemarket. One is through capital gains, the other through dividends. With Spark it is mostly dividends, which is not a surprise given they pay out all of their operational profits as dividends. That factor alone means you should not be expecting capital gains over the long term. I am pricing my Spark investment on modelled dividends. I expect the share price to get re-rated once this index swap business is out of the way and interest rates drop, based on the potential dividends available alone. Such a re-rating could happen next week, next month or next year. I don't know about the timing and frankly I don't care. All I know is that at some point as interest rates fall, that will put an upward pressure on the share price. That is all I need to know. Whatever distractions Mr Market follows up to that point, he can do what he likes. I am under no pressure to sell to him. 'Your decimated capital' statement assumes actions that are not going to occur, and that the diminution in the value of Spark shares is permanent.

I am not saying you are definitely wrong about FY2025. There may indeed me more postponed IT projects, and less company mobile phones as companies sack their field workers. But I think such a scenario is already priced into the share price. So even if it does happen, the Spark share price will not go down more. And I am prepared to back my view by buying even more Spark shares.

My sister wanted to invest in Spark and I told her don't and that TRA is the better bet and Infratil. So far I am correct. She bought both IFT and TRA, her portfolio is up over 15-20% in just over a month and has two dividends coming in her direction on top. I hope you are right about your tactic to buy more SPK and would love it to work for you, that it rises a lot.

You are a great contributor to this forum and have lots of knowledge to add to many different shares, especially when others like myself don't always understand the numbers game, so please continue being you.

Look no-one is saying sell everything and put all your money into Spark. FYI I have a decent size investment in Turners as well, worth more than my investment in Spark in fact (well it is now ;-P!). Infratil is a good company, but initially I just saw them as 'ticket clippers' on shares I could buy directly (Port of Tauranga, Trustpower back in the day). Latterly they just haven't come into my value price target range. IFT seems very 'hyped up' on the data centre craze to me right now, with lots of future growth already banked into the share price. So a good company. I can see why some invest in it. But too expensive for me right now. It doesn't tick my 'value' box.

The fact that your sister's portfolio is up 15-20% in a month -well good on her -but,- this is 'trader mentality'. I don't invest, trying to make a quick buck in a month. I spend zero time wondering where my shares will be priced in a month. Instead I study a company's medium term history and those of its competitors (OneNZ) and comparator investments (Telstra), to make sure my views of a potential investment do not get too 'one-eyed'. So far, Spark is still ticking that 'value recovery box' for me.

'Catching a falling knife' is 'trader talk', for those who don't understand how to calculate the fundamental value of Spark. That doesn't apply to me. If you are buying value you are looking for a 'price point'. That 'price point' is independent of whether a share price is rising or falling.

SNOOPY

[nztx]

Reading the Blackrock disclosure, they sold down 51m Spark shares, mostly between Nov 19-25.

Blackrock are the biggest ETF provider but there are others like Vanguard.

Forced seller.

The same mob who had to let the SolarZero company they only bought in 2022 fall over or get pushed over ?

https://newsroom.co.nz/2024/11/27/so...ed-solar-firm/


and what was it Blackrock came out with in the media after this ?

and the $115 m NZ Govt money at risk as well on SolarZero ?


Bound to have put many between a rock & a hardplace just before Christmas on just SolarZero being tipped over .

[Jiggs]

Weirdly, although the value of the Spark shares I bought for $5 each have fallen to only $3, I am still getting the same dividend payment every six months, so I am now getting a 13% dividend.

[Balance]

Weirdly, although the value of the Spark shares I bought for $5 each have fallen to only $3, I am still getting the same dividend payment every six months, so I am now getting a 13% dividend.

Less 40% capital loss which will take several years’ of dividends to offset.