Telus Corp (T.TO)

Doesn’t like the communications space. CRTC has been inundated with proposals for unbundling. There will be confusion in the space. Likes this one the best of the bunch because they are not impacted by content. Hold if you have it.

Getting into medical technology software. He does not know if this will move the needle. Loves how they tell you what will happen with the dividend. He is a buyer and bought today for new clients. Sees dividend going much higher in the future. Likes the reasonable valuation and certainty of the cash flows going forward.

Defensive stock. The bad news is all in the telecom sector already. They have done exceptionally well in wireless. They are going to use their free cash flow in areas like content and dividends. Very little downside in the stock and some growth going forward.

Have done well. Increased their dividend at a faster rate than Bell Canada (BCE-T). Likes how they conveyed the dividend plan to the market in the last few years.

Historically it does well in the summer months. It is interesting based on seasonal strength. It is trending along its 200 day moving average. Relative strength is a little better than the market. So it is okay as a buy and has positive seasonality to come.

We have had issues in Canada on telecoms, with the government looking like they want a 4^th player, which doesn’t make a lot of sense. At this point, you don’t know exactly how the government will interfere or what they will mandate for the incumbents to be doing. Not her favourite sector, but this is the best one of the lot.

Feels the current management team have done a wonderful job. They have transformed it into the kind of story that he really likes, focusing on their use of capital and the generation of cash. They are looking at consistently trying to drive their cash flow growth at 10% a year and returning capital aggressively to shareholders. Among the majors in Canada, this would be his favourite. On a near-term basis, the entire group are facing the headline risk of what is going to happen with a 4^th operator in the country.

Doesn’t own any stocks in this space. The good news is that this area is kind of an oligopoly and the 4 of them kind of control things. Feels this is the best stock in the sector. The longer chart shows they have had a beautiful run, and it is hard to argue with success.

Versus its peers, he really likes it. They have the best penetration on wireless and some of the better profit metrics. The group is struggling a little bit and have a few headwinds in their face on an inventory basis. However, he feels that a lot of that is starting to get factored into the stock. He hasn’t owned much telecom in the past year or so. Maybe it’s getting to the point where everybody recognizes that wireless is slowing down and there could be a 4^th player out there, but in the end these are great cash generating businesses.

He avoids telecoms because of government confusion or interference. Wait to see if we get a 4^th national player. If he owned one it would be this one.

He doesn’t have too much of a position in telecommunications. Going from the 3-year to the 2-year contracts has made it more expensive, and he thinks people are holding on to their phones a little longer. Also, when they do issue new phones, they now have to amortize them over a shorter period of time to recoup their costs. Revenues per person are being squeezed a little. Very competitive market. With the government wanting a 4^th national competitor, that could really affect the market to some extent too. Too many uncertainties.

(A Top Pick July 10/13. Up 25.86%.) 4% yield, and the expected dividend growth is quite high. Still likes and it would be a Buy at this time.

Has not owned telecom for the last couple of years. Would not be buying it here. The regulators really want to encourage competition. You buy telecom for the yield and steady cash flow but you can go elsewhere without the regulatory risk. A slow growth mature business.

Telecom sector went through some upheaval when the CRTC said that 4 competitors were needed in the marketplace. That really put a squash on the big run that all the stocks had. Momentum is slowing down for telecoms, and this has hurt this company for the last 12 months.

(Market Call Minute.) He is looking at this. Big blue chip and meets his criteria.