March 2019


Stock I'm watching this month:-

TLS - Telstra Corporation Ltd

Sector: Telecommunication Services
Market Cap: 37.23 Billion
Price/Earnings: 12.72
Price/Book: 2.48
Return On Equity: 24.8%
Return On Assets: 4.24%
Debt/Equity: 112.8%

Reasons to watch: Telstra is Australia's largest telecommunications provider. Just as oil & gas powered the second industrial revolution, digital data will be powering the fourth industrial revolution (Internet of Things, Artificial Intelligence, Autonomous Vehicles, etc.). I expect the future to be more and more data driven and will become part of the requirements in running our daily life. In terms of valuation, Telstra is considered moderate to cheap. The only thing that raises a red flag is the high debt levels but that is expected in a high capex industry.

Risk: The fourth industrial revolution is in motion but is yet to reach the level where it becomes widely adopted. It could take 5 or 10 years or more before society becomes truly data driven. Besides, Telstra is facing tough competition from Optus, Vodaphone and TPG for market share.

Sentiment: Buy
Disclosure: Held
Current Price: $3.13
My Strike Price: $3.6 (Discounted Cash Flow Intrinsic Value: $4)



Disclaimer: This does not constitute any financial advice or stock recommendations. As always, Do Your Own Research.

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