Tip of the day - buy some Telecom NZ shares

By Steve Biddle, in , posted: 18-Sep-2008 11:18

Currently at $2.70 these are a bargain!

Once all the idiots have sold out the better things will be for Telecom. Telecom is not the company it was 4 years ago. It is a lean mean telco run by a very smart CEO that will continute to dominate the NZ landscape for many many many years to come.

Lets hope the investors bailing out at present are the idiots who only invested in the company for their dividend - greedy people who were only ever in it for a quick return. Those same people who pushed for Telecom to make big profits and caused the problems that are now the stumbling block the company is having to deal with.

Those buying shares now are the smart ones who realise that a bargain they are getting...

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Comment by grant_k, on 18-Sep-2008 12:19

"Those buying shares now are the smart ones who realise that a bargain they are getting..."

Negative points concerning Telecom at present:

- Dividend is slated to be cut next year
- There will be no Imputation Credits
- Net Profit is forecast to keep reducing for the next year or two
- Growth Prospects are minimal at best

If you have a long-term investment horizon then fine, you may view all the bad news as being priced in @ $2.70.

However, even though I have been watching the slide in Telecom's share price with interest, I believe there are far better places to invest your money at the present time.

Author's note by sbiddle, on 18-Sep-2008 14:30

Dividend and imputation credits are two key factors that have driven Telecom shares over the last decade. The company was solely profit driven by shareholders who only invested because of the return they were expecting, ingoring the fact that a lack of capex would eventually lead to the collapse that has happened.

The reality is that in 5 years time Telecom will still be the dominant player in the NZ marketplace. They will be leaner and meaner and have a fantastic NGN to power them along. While there won't be growth now for several years long term growth prospects are certainly very good and the current share price is certainly a bargain buy.

Author's note by sbiddle, on 19-Sep-2008 11:55

Telecom shares currently trading @ $2.79

Comment by Fraktul, on 19-Sep-2008 15:12

There are a lot of good bargains to be had at the moment with the current state of the stock markets, both locally and internationally. Whilst I would agree that TCNZ stocks look quite attractive currently there are also plenty of other stocks which deserve consideration also. As always research is the key.

Comment by grant_k, on 30-Sep-2008 10:18

Telecom shares are now down to $2.60 i.e. another 18 cent drop today

$2.70 doesn't look like such a bargain anymore...

Comment by John Tiler, on 16-Oct-2008 20:49

now its $2.23! Does $2.70 sound good??!!

Comment by bjauck, on 30-Sep-2009 11:17

The history of Telecom NZ is a disaster for nz shareholders and for NZ. It was privatised as a monopoly by the NZGovernment and sold at a knockdown price to American interests. The Americans made a mighty fine profit by flipping it to Kiwi mum and dad shareholders. It became the most widely held NZ company. Since then the government has chipped away at its profitability in favour of mostly overseas run and controlled competing telcos.
Is it a wonder that Kiwis put their money into tax favoured rental housing when the returns from the largest and most widely held NZ commpany have been ambushed by the NZG.
Oh and BTW the unbundling of the loop has resulted in .....lower data caps for a higher price. Granted speeds may be slightly improved for some. But what can you do with it when data is so limited. Lightening fast for three days in a month then throttled to dial up speed!

sbiddle's profile

Steve Biddle
New Zealand

I'm an engineer who loves building solutions to solve problems.

I also love sharing my views and analysis of the tech world on this blog, along with the odd story about aviation and the travel industry.

My interests and skillset include:

*VoIP (Voice over IP). I work with various brands of hardware and PBX's on a daily basis
  -Asterisk (incl PiaF, FreePBX, Elastix)

  -xDSL deployments

*Structured cabling
  -Home/office cabling
  -Phone & Data

*Computer networking
  -Mikrotik hardware
  -WAN/LAN solutions

*Wireless solutions
  -Motel/Hotel hotspot deployments
  -Outdoor wireless deployments, both small and large scale
  -Temporary wireless deployments
*CCTV solutions
  -Analogue and IP

I'm an #avgeek who loves to travel the world (preferably in seat 1A) and stay in nice hotels.

+My views do no represent my employer. I'm sure they'll be happy to give their own if you ask them.

You can contact me here or by email at stevenbiddle@gmail.com