Telkom Undervalued on JSE !

DXL

DXL

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Telkom is a company that is seriously undervalued on the JSE.

Even without the 50% shareholding in Vodacom.

The share price is R36 a share.

Telkom is worth roughly according to the JSE R18 Billion.

For a company with fixed assets and almost a freehold network.

With every other Telecom company relying on it for some sort of service.

With Operations in other markets that are doing well.

Am i missing something here.

Please tell me !

Cell-C has R20 Billion worth of Debt.

What is Cell-C worth ?

I smell a rat here. Something sounds very fishy.

Someone's trying to grossly undervalue the company for a buyout.

Could be one of the BEE candidates close to ZUMA.

Telkom is like the Soundest investment one can make at the moment without Vodacom, as it has it's own Mobile phone LICENCE and a decent start-up network to.
Just wish they use the available funds to be more agressive with their 3G network Roll-out.


DXL - Mobile
 
Haha - just been discussing this earlier tonight. Telkom is now significantly undervalued imo and with their turnaround strategy they should unlock significant value. I sold at R50 and have been buying since it dropped below R37. Lets hope Project Renaissance pays off...;)
 
It will go up a bit. Not by much though. The problem with Telkom is the incompetent leadership. Now that shouldn't be such a big issue but in Telkom's case, the public at large have realized that :D Same with SABC (local, state owned news corporation). In your country, the underlying problem seems to be in incompetent leadership and the (forcefull) departure of qualified persons. Just about all companies/departments where the state has direct or inderect control go the same way. I leave it on you to decide as to why this seems to be a rule by now.
 
I agree with DXL.

As per their Sept half year results, the Telkom fixed line company (excluding subsidiaires and Vodacom) had assets worth R53billion. It posted an after tax profit of R3,1bn.

Right now Telkom has over R20bn in cash in the bank due to the Vodacom sale. About half will be paid out to shareholders in form of the R19 special dividend.

So the JSE market cap is ridiculously low, regardless of what anyone thinks of the management team.
 
I agree completely. I have maintained that even before Telkom was unbundled there was value in the share. It is highly unlikely that either Vodacom or Telkom will drop much below where they are now.

Now just to find the money to buy shares.
 
I know someone in Telkom management who's holding onto his Telkom shares.
In April he told me that the Telkom shares are undervalued and the Vodacom ones were overvalued. As soon as Vodacom listed on the JSE he sold his Vodacom shares but he's not letting go of his Telkom ones because he's certain that they will gain value.

Besides the massive internal restructuring going on, Telkom is now well positioned to develop their own 3G infrastructure and they have a lot of cash to play with unlike Neotel which has to borrow money for roll outs.
 
Paul, could it it be that that someone is only holding on to the Telkom shares because selling them now would represent a loss of significance. :D

As for me, I'll pass, thanks anyway. The tendency of our government "supported" companies to suddenly require massive bailouts is not just worrying, it's down right nightmare-ish.

Pass.
 
Some people here are clearly not really into the share market for a living. There are plenty of companies in the world with undervalued shares. The market sentiment right now does play a role too. However, management is the only thing more important then capital in a capitalist market :D Yes, if you strike it lucky you may end up making a few bucks but never forget, with a 'erratic management', there is also a fair chance of 'not been lucky'. Just as gambling at a Casino :D And yes, I too bought a handfull of shares. Unlike you though, I pray now for a take over (management change) Hmmm . . . Where are the Chinese when you need them? :D
 
davemc said:
Paul, could it it be that that someone is only holding on to the Telkom shares because selling them now would represent a loss of significance. :D

As for me, I'll pass, thanks anyway. The tendency of our government "supported" companies to suddenly require massive bailouts is not just worrying, it's down right nightmare-ish.

Pass.
Click to expand...

Why might Telkom require a bailout? :confused:

@Gomario - IMHO you're well off the mark, but let's wait and see...
 
@DJK Things been as they are, I really hope you are right and I am completely wrong. I agree with you on one thing - let's wait and see. (not too long though. We don't want other promissing opportunities to go by while we wait for Telkom)
 
some have said that Telkom will suffer a catastrophic breakdown... this could be the start - as to why, well that's another story
 
also you have to look at how the shares are represented, not what you think the might be, weighing the share is very complex hard work, dividends... stock, future, how many shares issued, for example one million at one Rand is different to two million at one Rand, remember trade is more spec driven than core - the bottom line in any market (such as this) is do you believe in the company and the answer here would be no, its just to make a bit - and there you have your problem, as soon as the mandate was swept under the carpet it is just a matter of time and promises - it is a good time for them to buy some of their own shares with the Voda money - buy what you believe in
 
If they squeeze in an extra 10 gigs or even a gig to each subscriber at the same rate, it would go up.
♥
 
DJK said:
Haha - just been discussing this earlier tonight. Telkom is now significantly undervalued imo and with their turnaround strategy they should unlock significant value. I sold at R50 and have been buying since it dropped below R37. Lets hope Project Renaissance pays off...;)
Click to expand...

Correct me if i am wrong, but Telkom shares only traded at R50 last week after the unbundling, but before the dividend (the share started trading ex-dividend on monday morning). So if you sold at R50 last week and bought at R36 or R37 this week, then you essentially sold your R19 dividend for R50-R37 = R13 :confused:
 
roberth said:
Correct me if i am wrong, but Telkom shares only traded at R50 last week after the unbundling, but before the dividend (the share started trading ex-dividend on monday morning). So if you sold at R50 last week and bought at R36 or R37 this week, then you essentially sold your R19 dividend for R50-R37 = R13 :confused:
Click to expand...

I wasn't taking any chances. As per a previous thread, I didn't expect Telkom to be sold off to the extent it was. So R50 was my bottom - I figured if it was going to drop further, then I was way off and there was no way I was going to try to guestimate where it would bottom out at, especially considering what it was trading at last year...
 
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