The old Telecom NZ, SPK delivered a disappointing 1H23 result last week but the outlook is expected to improv, the issue for us is the stock has run hard and if it doesn’t deliver on these expectations we could see SPK at $4 in rapid fashion. However, the company has announced a NZ$350mn on-market buyback starting April 5thwhich should prove supportive of the stock as is its forecast 5.15% yield.
• We like the SPK business but the risk/reward is not exciting around $4.60.
SPK, formerly Telecom Corp. of NZ, has performed strongly through 2022 advancing +8.8% in a tough environment but it’s not particularly cheap above $5 forcing us into a neutral corner. We like SPK on its improving outlook for mobile revenue and prospect of higher dividend growth – a few months ago they reported a strong FY22 EBITDA of $1.150bn which was in line with guidance.
SPK which is formerly Telecom Corp. of NZ has been the standout sector performer over recent years but it’s not particularly cheap above $5 however the trends friend especially in a market as nervous as today i.e. SPK is performing strongly and is in a relatively recession-proof industry. We like SPK on its improving outlook for mobile revenue and prospect of higher dividend growth - they recently reported a strong FY22 EBITDA of $1.150bn which was in line with guidance.
SPX has been the standout sector performer over recent years but it feels fully priced near the $4.50 area. The company has significant infrastructure spend planned for 2022 including funds to accelerate the 5G rollout. We really like what the business has achieved over recent years but it’s a touch harder to see major growth moving forward e.g. the companies...
Take a free 14 day Market Matters trial – full access to all our reports, portfolios, positions, buy and sell recommendations. Access the latest views on the latest developments from professional money managers. It's free and no payment details are required