Forum Archive Index - April 2002

["tennyson@caverock.net.nz" <tennyson@caverock.net.nz>]

Hi Barry,

I share your cynicisim about TEL.  Yes there are some NZ compnaies 
that have done well across the ditch.  Michael Hill and Hallensteins 
spring to mind.   But I do agree that it is very difficult to see an 
acceptable rate of return ever coming out of AAPT.

I think you have to consider TEL as a potential recovery share.   It 
is very difficult to pick when a share bottoms, but I would hazard a 
guess that around $4.20 is as low as you will ever see it go.  The 
dividend yield is simply too good to allow it to drop below that 
level IMHO.   If you could buy in at around $4.60 that would be 
within 10% of the low point.  I must admit, I'd be tempted to 'top 
up' if it got that low again.  I think TEL has become a bottom drawer 
share for the moment.   You won't see any major action either 
up or down.  Buying in at around $4.60 would give you a yield of 
around 7% fully imputed.   That sounds like quite an attractive place 
to put money instead of in a cash deposit at the bank, don't you 
think?   And if the share price drops below $4.60, so what?   You can 
afford to wait until it rises in price again with all those dividend 
cheques rolling in.

The recovery should come with the abandonment of AAPT and the sacking 
of Gattung.  TEL will be back to the core business then, which will 
be the trigger that the share price needs to soar.  Give it a couple 
of years.  Can you wait that long?  SNOOPY

discl: Hold TEL






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