Telus Corp (T.TO)

Telco landscape is incredibly confusing. Government doesn’t know what it is doing in that it wants more competition but doesn’t want to open up the forum. Telus is “best in class” in this industry. Got hit with the interest-rate movement. He feels it is more compelling now that it’s come off 10%-15%. It is still a very, very consistent free cash flow yield industry regardless.

Telcos were dropping well before the worry about Verizon (VZ-N) coming into Canada. Although he owns all 3 telcos, he would feel that Rogers (RCI.B-T) and Bell (BCE-T) are much more attractive. He thinks what is missing from this company are the other assets. This one is primarily wireless. They are trying to push into TV and this has put them at a disadvantage.

Not been doing well over last little well but made a good base. Looks interesting. Just made a death cross but he does not believe in it.

The pullback is related to 2 things. Interest rates rising and Verizon (VZ-N). Has the highest exposure to wireless out of all the telecoms. If Verizon comes in and are allowed to buy up spectrum and the user network it could get worse. If the government puts the rules on a level playing field, it could hold in here. Has good dividend growth at about 10%.

Doesn’t have a lot of exposure to Telcos. He is tempted to step in. Our market could look attractive to Verizon. But he thinks we will see some evolution in the industry. Prefers T-T today to BCE.

If you are looking 3 to 5 years out, this would be his favourite but thinks this area is going to be very tough competitively.

With Verizon (VZ-N) talking about coming into Canada, which telco would be the safest bet, Bell Canada (BCE-T) Telus (T-T) or Rogers (RCI.B-T)? Interestingly enough, Sprint in the US just announced that they are offering “guaranteed for life” unlimited data so there is a bit of competition in the US. BCE is probably the safest with Rogers having the most exposure. It is difficult to say what is going to happen with Verizon.

Has been a tremendous long-term performer having pretty well doubled over the last 4-5 years. Very well run. Since Bernanke talked about tapering on May 21st and Verizon (VZ-N) confirmed that it was thinking about coming in to Canada, the stock has weakened very sharply. Believes the dividend growth target of 10% is maintainable. If Verizon comes in, the landscape will be more competitive. Feels it is at a pretty reasonable valuation now. We will get a big bump if Verizon does not come into Canada. Very much a speculative Buy.

Obviously the selloff was overdone. Despite Verizon (VZ-N) being a big brand dominant name, he feels they will face some obstacles when they are competing against the Canadian telcos. If they buy Wynd and Mobilicity they will have less reliable networks. Also, bundled pricing is big. This selloff is a pretty decent opportunity.

With Verizon making overtures to come into Canada it traded off with the others. Telus really stands out as one of the top telecom names, insulated slightly from Verizon coming in. Dividend growth company with mandated dividend growth over the next 3 years. The sell off is largely over done. Rogers would be the most exposed to Verizon and BCE not so much.

Likes sector. Suffered with Verizon rumour. He sees it as having lots of uncertainty. No approvals. There are lots of balls in the air.

Telcos in Canada are all trading at hefty valuations. Sold off when we heard ‘tapering’ comments. They are now in more mature markets than they used to be. Verizon coming in will affect pricing and margins on that business. Just in case Verizon does come in he got out of telcos.

The overriding concern is if Verizon is coming into Canada. Doesn’t want to touch telecom until we know. He feels there is increasing competition.

One of the strongest companies in Canada. You can’t go too wrong. Steady cash flow, nice dividend yield. But he would wait because the higher dividend yielding companies are probably going to underperform in the near term. He has a small holding.

Feels the stock dropped because of the recent ruling from Revenue Canada. At the end of the day, he doesn’t think there is going to be a 4^th player. All 3 telcos you could buy at their current levels but this one, of the 3, has the greatest amount of growth. His target price is $41 in 12 months. 4% quarterly dividend yield.