Packer16 Posted February 14, 2013 Share Posted February 14, 2013 This appears to be a bombed out sector. Has anyone looked at these? It looks like Telecom Italia, OTE and Telefonica still have growth due to their emerging market exposure. These have EV/EBITDAs in the 4s to 5s range and FCF yields in the low 20%. Packer Link to comment Share on other sites More sharing options...
PlanMaestro Posted February 14, 2013 Share Posted February 14, 2013 This appears to be a bombed out sector. Has anyone looked at these? It looks like Telecom Italia, OTE and Telefonica still have growth due to their emerging market exposure. These have EV/EBITDAs in the 4s to 5s range and FCF yields in the low 20%. Packer There is a Telefonica thread. http://www.cornerofberkshireandfairfax.ca/forum/investment-ideas/tef-telefonica/msg74763/#msg74763 Portugal Telecom is another one. The main risk is their Euro debt if those countries leave the Euro, the debt load is huge.TEF and PT have large Latin American operations but still something to handicap. A good case study is the Telecom Argentina default of 2002. http://news.bbc.co.uk/2/hi/business/1907607.stm Link to comment Share on other sites More sharing options...
constructive Posted February 14, 2013 Share Posted February 14, 2013 Surprising there's no Vodafone thread. Considering their Verizon Wireless stake they look pretty cheap too. Link to comment Share on other sites More sharing options...
king888 Posted February 15, 2013 Share Posted February 15, 2013 Marc Faber from Feb 13th . " There is an opportunity in European telecom companies in the present time" http://finance.yahoo.com/blogs/breakout/fed-party-over-invest-overseas-marc-faber-140453716.html Link to comment Share on other sites More sharing options...
rijk Posted February 20, 2013 Share Posted February 20, 2013 kpn could also become an interesting opportunity..... the combination of right issue dilution, proceeds being used to pay off debt and the pressure from slim could generate an interesting opportunity regards rijk http://www.reuters.com/article/2013/02/20/us-kpn-americamovil-idUSBRE91J0ZN20130220?feedType=RSS&feedName=businessNews&utm_source=feedburner&utm_medium=feed&utm_campaign=Feed%3A+reuters%2FbusinessNews+%28Business+News%29 Link to comment Share on other sites More sharing options...
Edward Posted February 22, 2013 Share Posted February 22, 2013 I believe France Telecom is the cheapest EU telecom by far with the least debt load (around 2 Net debt/EBITDA) and the longest fixed rate debt maturities (9 years). They usually generate EUR 8-9B in EBITDA-CAPEX per year, pay 1.5B in interest, and 1B in cash taxes, leaving around 5.5-6.5 FCF per year. Market cap is EUR 20B, so the FCF yield is somewhere around 30% at current share price. Link to comment Share on other sites More sharing options...
PlanMaestro Posted February 24, 2013 Share Posted February 24, 2013 Slim backs KPN €4bn rights issue http://www.ft.com/intl/cms/s/0/d08da50c-7b45-11e2-8eed-00144feabdc0.html Under the agreement KPN will execute a €3bn rights issue and issue hybrid bonds making up the additional €1bn. The agreement is subject to shareholder vote on April 10. América Móvil’s support came as a surprise to some analysts and bankers who expected Mr Slim to make more demands from KPN’s management. The rights issue, originally earmarked for €4bn, prompted speculation that Mr Slim would consider buying the company or seek to uproot senior management. “Any investor when faced with a company’s decision to issue €4bn when it has a market capitalisation of less than €5bn will ask: is this management credible?,” one person close to the deal said. “They [AMX] certainly weren’t handled in the best way in terms of getting information,” the person said, adding there was still tension between the two companies over KPN’s failure to inform América Móvil ahead of its decision to seek a rights issue. The move will dilute Mr Slim’s stake in KPN. He has already lost €1.7bn since he battled with KPN management last year to acquire a 27.5 per cent stake in the company. Link to comment Share on other sites More sharing options...
PlanMaestro Posted March 7, 2013 Share Posted March 7, 2013 Surprising there's no Vodafone thread. Considering their Verizon Wireless stake they look pretty cheap too. Vitaliy Katsenelson Vodafone Group is one of the largest global mobile phone companies in the world and yields more than 8 percent, counting annual recurring “special” dividends. It has an A-rated balance sheet, and it can pay off any annual debt maturity from its ample free cash flow. In addition, at some point Europe will come out of what seems to be a perpetual recession, and Vodafone’s earnings growth will accelerate. The company’s crown jewel — its 45 percent stake in Verizon Wireless — will be monetized. The Indian market, where Vodafone is a big player, will continue to improve, and the company will start earning a reasonable return on investment there. Last, our societal addiction to being able to access the Internet anywhere at any time on any device will kick into ever-higher gears, and data sales will accelerate Vodafone’s revenue growth. Link to comment Share on other sites More sharing options...
blainehodder Posted March 7, 2013 Share Posted March 7, 2013 I'm long the iShares Spain ETF. Seems to be a cheap way to get in on cheap stocks in a cheap market...it holds positions in Telefonica and Banco Santander etc. Plus it is free with my broker to buy ETFs. Woooo! Link to comment Share on other sites More sharing options...
PlanMaestro Posted March 9, 2013 Share Posted March 9, 2013 Talk stays cheap for Vodafone and Verizon http://www.ft.com/intl/cms/s/0/2131d3ba-8682-11e2-ad73-00144feabdc0.html#axzz2MzskH3GK The Verizon management has made no secret of its desire to buy a business that generated an $8.5bn dividend last year. Fran Shammo, Verizon chief financial officer, again told a conference this week that “there was nothing new to report on the Vodafone venture”, repeating that “Verizon has always been interested in owning all of the US wireless business.” Vittorio Colao, Vodafone chief executive, has also been consistent in his message about the stake in Verizon Wireless, describing himself as the custodian of an asset that sits outside core operations. The sale of the 45 per cent stake could raise as much as $115bn for Vodafone. In Barcelona last week, Mr Colao again said that he kept “an open mind” to a situation that is reviewed at length in a board meeting twice a year. As such, in theory, there is a willing buyer and a potentially willing seller. The conditions have also improved for a deal – certainly much better than during the fractious relationship that existed between the two companies’ previous managements that saw the Verizon Wireless dividend frozen for many years. Link to comment Share on other sites More sharing options...
dolce2think Posted March 9, 2013 Share Posted March 9, 2013 I have been looking at the telecoms for quite some time - as there seems to be opportunity. Traditionally - after the TMT bubble, they were seen as poor in share appreciation/high in dividend yield. I think a lot of investors have kept these shares for its defensive character and yield, just as to realize that they are also impacted by the european crisis (especially in the 2nd half of 2012). Many institutions have thrown in the towel. Currently the cheapest seems to be Telecom Italia, but as has been pointed out, there is the euro exit risk. So France Telecom seems the best in terms risk/reward - also KPN, once the dilution is factored in. While looking at the FCF yield is important, one should not forget, that some of them underinvest vs the traditional line like 15-20% capex requirement. Further, in many countries the telecoms have been loosing ground to the cable companies for the fixed line triple play business, but in some countries like the Netherlands this seems to be reversing as FttH is coming, which puts the telcos in advantage again. Down the road, the 4G rollout could bring devastating competition - especially in the low end space. There will be essentially 3 ways to reach the customer - cable, telephone, 4G - and all will be able to stream movies. I guess many people will then cut the cord and have all over their wireless for a all-flat rate which is lower than the combined rates are now. That's as commodity like is it may become....yet it may take a few years for the 4g to reach that capacity. Link to comment Share on other sites More sharing options...
writser Posted April 26, 2013 Share Posted April 26, 2013 Anybody here looking at KPN? Stock is getting slaughtered after the rights issue. Link to comment Share on other sites More sharing options...
rijk Posted April 26, 2013 Share Posted April 26, 2013 here are 2 relevant articles for people who are interested in kpn slim bought at €8 less than a year ago, current stock price around €1.55.......... regards rijk http://www.gurufocus.com/news/216923/better-know-a-company--kpn http://valueinvestingfrance.blogspot.com.es/2013/04/vivendi-2012-annual-results-update.html Link to comment Share on other sites More sharing options...
Aberhound Posted April 26, 2013 Share Posted April 26, 2013 I bought some France Telecom because of the relative low price for the cash flow and on the speculation that bond investors will allocate more funds to stocks. I also believe that the switch to mobile computing will continue creating demand even in a recession. The stock price may dip on crises in Europe and a cheaper Euro so I left room to add. There seemed to be plenty of room to cut costs and a willingness to lower prices to compete. I have a general bias favouring French management. Link to comment Share on other sites More sharing options...
PlanMaestro Posted July 22, 2013 Share Posted July 22, 2013 Telefónica in talks to buy KPN’s German unit for $16bn http://www.ft.com/intl/cms/s/0/39347ede-f2d6-11e2-802f-00144feabdc0.html#axzz2ZkRKDYnt Link to comment Share on other sites More sharing options...
saltybit Posted September 15, 2015 Share Posted September 15, 2015 What do people think of this sector now? I think TI (telecom Italia) is interesting, relatively cheap and with Bollore/Vivendi on board, there will probably be deals and catalysts in the future. Link to comment Share on other sites More sharing options...
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