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Telstra Shares

Discussion in 'Other Asset Classes' started by Darlinghurst Boy, 11th Oct, 2016.

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  1. Darlinghurst Boy

    Darlinghurst Boy Well-Known Member

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    i see Telstra (TLS) have gone down to $5.05

    Do you think they are worth buying should they get lower say $5.00?

    What is the chance and time period for them to hit the $6 mark ?
     
  2. bob shovel

    bob shovel Well-Known Member

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    The messiah has returned!

    Where have you been? How's business
     
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  3. BingoMaster

    BingoMaster Well-Known Member

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    Quick, let's all consult the oracle! Or maybe this time we should ask the tea leaves...
     
  4. Bran

    Bran Well-Known Member

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    I bought some at 5.00 this week.
     
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  5. ErYan

    ErYan Well-Known Member

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    At that price the yield is around 6% fully franked - over 8% grossed up. This company could, and sometimes appears to be, run by a bunch of people throwing darts at a wall, but they still make money. As Warren Buffett say, this is the perfect business Warren Buffett explains why a good business is one 'your idiot nephew' could run

    Better than buying term deposits.

    Only one thing to consider is whether this or TPM, a company in the same sector as TLS, better value at the moment. Note TPM focuses on growing rather than dividends. They actually know what to do with money so that's not necessarily a bad thing.

    If TLS decide they know something about running a business and reduce dividends to fund such an idea, you can start to worry.

    I have TLS but I don't buy direct shares these days.

    Not advice.
     
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  6. hash_investor

    hash_investor Well-Known Member

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    TPM has been hammered during the last 1 month. Do you think its a buy as it might come back to its original level soon or there is more downturn ?
     
  7. datto

    datto Well-Known Member

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    There seems to be some uncertainty about telstra from what I can gather eg NBN and ACCC effect on earnings..

    I hold telstra and of course I'm waiting for that rebound as at the moment this stock is like smacking my rear end from one end of the Druitt to the other lol.
     
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  8. ErYan

    ErYan Well-Known Member

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    If I knew for sure I'd buy it myself. Because I want to lower my volatility and risk I only buy ETFs and LICs and therefore do not own TPM. It also means I don't need to research shares. The guy to ask about TPM is @The Falcon. He is a guru and recently mentioned that some very experienced professional investors running BKI said it was oversold at $8. These are risk averse investors who have been in the game a long time.

    My only reason for bringing up TPM was as a comparison to TLS. Same sector, both cheap, TPM in particular. I could probably run Telstra better than the current executives, which means that it'll be pretty hard to destroy.

    Not advice.
     
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  9. devank

    devank Look, lets just get on with this, ok? Premium Member

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    It's going under $5 again. Is it safe to add more?
     
  10. willair

    willair Well-Known Member Premium Member

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    [​IMG]

    Hard to say what happen but when the silent character of the truth comes out in charts sometimes it follows the same patterns..imho..
    Plus have held TLS for a long time never worried about the day week month price ,just the cheque that comes 2 times a year..
     
  11. devank

    devank Look, lets just get on with this, ok? Premium Member

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    It doesn't make sense to keep buffer in an offset.
    I'm better off placing it in a stock which gives more than say 3℅ dividend 100℅ franked.
    Say the Interest Rate is R.
    Tax rate is T.
    Dividend rate is D.

    So, by placing the fund 100℅ into shares will give D℅.
    The extra interest we need to pay is R℅
    There is a negative gear benefit. So the actual loss = R x (1-T)
    So as long as D > R x (1-T), also the price doesn't fall, we are better off.
    Eg: R = 4℅, T = 37℅
    R x (1-T) = 2.52℅
    So any shares gives more than 3℅ fully franked dividend should be fine.
     
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  12. lamecrocs

    lamecrocs Active Member

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    Thanks @devank, I've been thinking about this. But the formula is perfect, I could just pop in the numbers.
     
  13. Archer

    Archer Active Member

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    Dividends depend on earnings - TLS earnings are decreasing and the current DIV is not funded by profits, they are diping into capital to maintain them. The equation does not take into account capital losses!
     
  14. devank

    devank Look, lets just get on with this, ok? Premium Member

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    "So as long as D > R x (1-T), also the price doesn't fall, we are better off."
    I wouldn't be on this forum if I know what will happen to the price :)

    Assumption is that you buy the stock which you are happy to hold long term.
     
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  15. willair

    willair Well-Known Member Premium Member

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    Tls the high point was around 2-2-2015 --$6.73 ,the low was around $2.63 22-11-2010 ,and the dividend now is around 6--4% fully franked-After tax adj is 5.00%,plus from what i have seen for a long time dividend stability
    the same as in the big 4 banks,and you would not constantly be asked by your broker to top up margins like during the 2009 during the height of investors fears about the depth of the worldwide banking crisis which we are now in that 8-9 years range where everything can go sideways very quickly..imho..
     
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  16. orangestreet

    orangestreet Well-Known Member

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    I bought TLS yesterday at 4.87. This is after it had dropped off 6% in next to no time after its half-yearly results announcement.

    At that price, with current dividend payouts, it is grossed up yield in excess of 9%. Happy to hold TLS for the VERY long term and collect my dividends twice a year.
     
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  17. miximitosis

    miximitosis Well-Known Member

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    This is the bit that concerns me with TLS. As I'm recently coming to grips with, you've got to be careful not to get caught in the yield trap.

    If dividend income is the goal, you should be focusing on increased earnings rather than yield.
     
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  18. lamecrocs

    lamecrocs Active Member

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    Can anyone please help me to make sense of the NBN impact on telcos like Telstra and TPG?

    Why do their share prices drop so much because of NBN alone? Is NBN operated by a separate or government entity which is not related to any telcos?
     
  19. orangestreet

    orangestreet Well-Known Member

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    Telstra have said that their EBITA will take a hit of $2 - 3 billion once the NBN roll out phase is complete in 2020.

    However, Telstra is ramping up efforts and making huge investments (approx 3 billion) in new technologies and better customer experiences. That is exactly why investing in good quality companies which don't have a 100% payout ratio is important. Excellent companies continue to invest in its people, its products and services to provide growing returns to their shareholders over the longer term.

    Whether Telstra will achieve this is unknown. We will know soon enough.
     
  20. devank

    devank Look, lets just get on with this, ok? Premium Member

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    They have plenty of room to make efficiencies on their human resource area ;)
     
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