Darren Sissons Deutsche Telekom AG DTEGY-OTC BUY Feb 13, 2013

One of the world’s largest telecom companies. The issue with the European telecom space is that competition has gotten very, very intense. Historically they have been great growth vehicles, high margin, highly cash generative (CapX).

These were very, very cheap stocks from a European context and have been running up. A big issue is that there are way too many telecoms in Europe. Because they are big companies and viewed as important, mergers are not allowed very easily. Lack of consolidation has been the difficult part. Stocks are very cheap and they pay very good yield.

(Top Pick Dec 18/12, Up 55%) They own T-mobile in the US and people expect them to get taken out. Thinks there is further upside.

(A Top Pick Jan 31/13. Up 39.34%.) This company is the largest owner of T Mobile in the US. That is the real spur to the company.

(A Top Pick May 24/13. Up 41.63%.) Owns T Mobile in the US which they are trying to sell. Thinks the noise is a little early and we are going to see a year or 2 before this plays out. A little rich at this point so wouldn’t buy at this time.

The biggest telecom provider in Germany, as well as the biggest shareholder in the US in T-Mobile (TMUS-Q). He expects that sometime in 2017 they will be trying to sell their ownership of T-Mobile. The stock is highly profitable. Raises its dividend regularly. Dividend yield of 3.87%.

(A Top Pick June 17/16. Up 21%.) He likes Europe, which he thought was undervalued for quite some time. He likes the telecom business there because it is consolidating, and this company in particular, because it is the largest shareholder of T Mobile in the US.

The difficulty with all European telecoms is competition. Costs are high and profits are low. This one is down about 9% this year. It has a yield of about 4%, but revenue growth has only been 1%-1.5%.

Share performance recently lagging, however performance strong all year.
Slowly growing with stable dividend.
Concerns for competition from the USA not a big worry.
CAPEX expected to come down which will help cash flow.
Expecting more increased dividends & more share buy backs.