In this section we place one stock under the microscope and give it the unconventional assessment. Telstra (TLS) is Australia ’s largest network  provider and has worked with  public and private enterprise to present new and competitive offerings to customers over the last 5 years.  Telstra has a  market  leading  position  in mobile, fixed voice, broadband  and computer  devices which  puts  them in  a  great  position  to  capitalise on  the  high  demand  for such services in the short- to mid- term. In Australia Telstra provides 17.7 million retail mobile services, 4.9 million retail fixed voice services and 3.6 million retail fixed broadband services. Bulls Telstra has a dominant position across all vital telecommunications mediums and will more than likely protect these positions going forward. The telco also has a competitive advantage having invested large sums of money into its mobile network that covers vast areas throughout Australia. The decommissioning of Telstra’s ageing copper wire voice network was done via an $11bn deal with the NBN Co. Reports are that the NBN Co will pay Telstra hundreds of millions of dollars every year until 2041 and very likely until 2061, just to access infrastructure. Bears Government regulatory risks are a real concern. The NBN broadband wholesale prices have reduced all telecommunication company’s revenue in fixed products. Government regulation on mobile roaming can force Telstra to allow other providers access to their network. Once NBN is fully rolled out, Telstra will shift from a wholesale broadband provider to a reseller. At the same time, competition has increased in both mobile and broadband. It can impact revenue. TPG Telecom (TPM) – Is becoming a competitive force after it moved into mobile. It is building its own network which will mean Telstra faces even more challenges from other telco brands. Do we invest in it? Yes we do. Telstra currently sits in the Income Bucket.  Broker Comments Morgans (ADD $3.50) – The broker has a bullish view on the telco. Recent results were in line with its guidance. Things are getting better, risks are to the upside. Macquarie (UNDERPERFORM $2.80) – The broker has downgraded its recommendation. It says the result was at the lower end of expectations and competition is intensifying especially in mobile. Fundamentals Telstra’s financial health is quite sound. The telco reported $4.9bn in free cash flow for fiscal 2018. It has a very strong cash position which allows for further acquisitions and or dividend payments. Telstra trades on a forward PE of 10.06x with a ROE of 16.17%. Its gross dividend is 6.74%. EPS growth is however negative at -23%. Morningstar has a fair value price of $4.40 versus its current price of $3.18. Unconventional View Just as things were getting more competitive…

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