Over the course of the last six months, TLS shares have been beaten down as the company purges its liabilities to the NBN and re-calibrates other assets.
As part of that process, the telecom giant announced that it will be writing down the value of its Ooyala video streaming firm to zero.
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This will result in an impairment charge of $273 million in the half year numbers.
Technically, TLS shares have been building a solid base in the $3.50 to $3.60 area and we expect to see the stock trade back into the $4.00 handle over the medium-term.
With an annual dividend yield just under 8%, we suggest investors look to accumulate TLS shares in this price area.
Telstra
Jamie Hooton says:
Thanks Todd
But i can’t agree that the yield for Telstra will be almost 8% unless your including franking credits?
At a forcast div of 22 cents for 2018 and 2019 equates to a 6.28 % yield ( not including FC ) at a price of $3.50
Todd says:
Thanks for your question, Jamie.
That’s correct, on a “grossed up” basis, including franking credits, we calculate the annual yield for holding TLS to approach the 8% level. This does not include direct price appreciation of the stock, which we believe has an upside potential to reach $4.40 during 2018.
Cheers………….TD