Telcos are horrid investments (#580)

JSE Direct with Simon Brown

Old Mutual Results:

• Surprisingly strong results from Old Mutual.
• Despite stagnant GDP growth and population decline, Old Mutual shows strong growth, indicating market share acquisition.
• Expansion into banking sector questioned due to market saturation.
• Stock analysis: Trading around 1184, showing potential support at 1150 and resistance at 1240-1280.
• Considered cheap with PE ratio around 7.7 and dividend yield over 7%.
• Market consensus predicts an average price target of 14.81.
• Skepticism remains regarding the bank launch and overall upside potential.

MTN Results and Analysis:

• MTN's earnings affected by Naira devaluation in Nigeria.
• Earnings per share down 72%, impacted by tax issues and currency devaluation.
• Stock analysis: Chart showing positive signs, with potential for short-term growth.
• Market consensus includes three strong sells, five holds, and four buys.
• Telco sector struggles due to price pressures and constant capital expenditure.
• Limited upside potential for telco stocks, including MTN.

ADvTech* Results and Operational Leverage:

• ADvTech demonstrates strong operational leverage.
• Operational margins increase due to improved student occupancy rates.
• Revenue up 13%, HEPS up 19%, and dividend per share up 45%.
• Stock analysis: Notably increased in value but still offers potential growth.
• Expectations for around 15% growth in the future.
• Simon Brown expresses satisfaction as a long-term shareholder in ADvTech.

Monetary Policy Committee (MPC) Meeting Insights:

• MPC meeting concludes with no change in rates.
• Governor's hawkish stance indicates possible rate cuts later in the year.
• Inflationary pressures expected to persist due to global factors.
• Delayed rate cuts expected due to inflation concerns.

SALTA Awards Highlights (full details here):

• Simon Brown attends the SALTA Awards.
• Satrix emerges as the big winner with 10 awards.
• People's Choice Awards highlight popular ETFs, with Satrix Top 40 winning for the seventh consecutive year.
• Introduction of a new award category for foreign ETFs.
• Importance of industry events in highlighting the significance of ETFs and listed trackers.

Simon Brown

* Simon holds ungeared positions.