Talktalk Telecom Share Discussion Threads

[bamboo2] 14/5/2016 10:21

Chart looking positive and all set for a Golden Cross. [Could be w/c 23 May]
Support for the share price from the 50 SMA now assisted by the 200SMA

[1gw] 13/5/2016 18:31

Thanks canaries2. Just need a catalyst to get it started (Odey closing?) and then a belief among the remaining shorters that once it starts it will keep on going so that it would be better for them to close sooner rather than risk leaving their positions open.

[canaries2] 13/5/2016 15:58

1gw.
excellent response.
I stand corrected.

[1gw] 13/5/2016 15:28

It's 4% declared shorts, but 90m (about 9%) shares on loan (April average according to Euroclear). The FT tearsheet categorises "Markit short-selling activity" as "medium".

But the key is how many shares are actually available to buy, given the holdings of the chairman, Charles Dunstone and the co-founder David Ross. Big shareholdings are:

31% Dunstone (source: annual report)
12% Ross (source: annual report)
15% Capital (source: March 2016 TR-1)

So if you say that at least Dunstone and probably Dunstone & Ross won't be selling shares to allow shorters to close, that's likely to be 43% unavailable to shorters. If you further say that Capital might hold tight, that's 58%.

So 9% short when there might be only 42% available is a very big deal.
And even just 4% when there's only 57% available is quite significant, isn't it?

[canaries2] 13/5/2016 14:42

4% declared shorts is nothing in this market. Can't see how that small amounts of shorts will cause a big spike.

[1gw] 13/5/2016 12:35

The counter-argument is that the results removed quite a lot of uncertainty around the business recovery. Odey reduced its short quite a bit coming into the results but there's still nearly 4% declared short in aggregate (and goodness knows how much undeclared) so momentum-wise a lot may depend on whether Odey and the other declared shorts decide to call it a day now and start moving to close. If so, this will be visible from the FCA spreadsheet and this may persuade undecided, undeclared shorts to close as well.

As I've pointed out before, given the large holdings of some who might be expected not to sell (Dunstone & Ross), other large holdings (Capital) which might choose not to facilitate short exit in the near-term, plus the large shares-on-loan position, that could cause quite a spike.

[canaries2] 13/5/2016 11:09

Sold my holding the day before figures at 272.50 as I thought the sell on news would apply. Looking to get back in at a lower price i.e 240 ish. 10% turn wouldn't go amiss. That figure may be reached coming into june and the vote.

[muscletrade] 13/5/2016 09:35

barclays reiterate their overweight and 350p tp.

[1gw] 12/5/2016 17:34

Short interest.

Citadel increased yesterday, from 0.59% to 0.63%.

[pierre oreilly] 12/5/2016 11:28

1GW. My speculation, and that's all it is fwiw, is that shorters moved in early today on the initial rise. I expect you'll show the shorting positions in due course.

I'm all for the price rising, even moderately, as further shorts are opened. The price just gets further rises built in when the shorts close, whenever that is.

The other thing i really like is that i expect most new subscribers to whatever product have an 18 month contract with various discounts which disappear at 6 months and 12 months. So my payments go from something like £19pm (for phone, all calls, fibre, mobile, landline cost) to 27 after 6 months, 32 after a year as the discounts expire. It means that even with no new customers, talks revenue increases significantly (all other things being equal).

[1gw] 12/5/2016 11:20

Not much "sell on the news" this morning by the look of it. What do the shorts do now?

[1gw] 12/5/2016 11:16

Good solid release and presentation I thought. FY16 came in slightly below analyst expectations on revenue and eps I think, although the talktalk collation of estimates shows then slightly ahead on ("headline") EBITDA.

4Q seems to have gone really well with headline EBITDA margin over 18% and "lowest ever churn" (where's xxxxxxy?)

Guidance for FY17 also solid, reiterating the 2nd Feb guidance, but I would say with reduced execution risk following 4Q actuals.

As always DH puts on a very confident performance.

Haitong asked a couple of questions on the webcast, so that might give you an idea of some of their concerns. There was also a very good set of questions right at the end by another of the bears - pointing out in particular talktalk's repeated failure in recent years to hit the guidance for the full year that they gave at the start of the year.

Personally I like the story again. Given the 18% margin in 4Q I think they don't need to do much more than sustain that for FY17, together with very modest revenue growth, to meet the middle of their £320-360m EBITDA target. I hope there are no unpleasant surprises on exceptionals this year (beyond the £25-30m guidance) and if so, the forward statutory p/e at 270p share price looks to me about 21 (and adjusted p/e a bit less of course), which I think is very reasonable now for the business, given its growth potential.

My opinions and analysis only. Please do your own research.

[muscletrade] 12/5/2016 09:55

i see that haitong securities have as usual been quick to reiterate their sell recommendation and 160p target again. however considering that they do this every two or three weeks, and have done so for ages one has to wonder what is behind such consistent negativity that the market has ignored, so far . if i was a sceptic i might begin to think that skullduggery was behind it , but obviously that would be silly.

[pierre oreilly] 12/5/2016 09:27

Excellent results imv. Especially please with the 15% divi increase as guided, and the guide it'll increase again next year. Ex-hack costs, all the numbers look great, just a shame the statutory p/e is post the 88mil cost. The cost to me is looking more like a forced investment with benefits showing in the last quarter.

[quepassa] 12/5/2016 09:26

They just kept their promise to increase divi by 15%.

They have promised to pay at least the same divi next year.

This means a yield of 5.8% against a growing and improving business.

ALL IMO. DYOR.
QP

[semper vigilans] 12/5/2016 08:05

Pricing is clear, but once you have a problem the service is dreadful.

[quepassa] 12/5/2016 08:02

Particularly encouraging results after the cyber attack episode.

Well done , TalkTalk.

Dividend up 15%. Wow! That's great.

And a promise of AT LEAST the same dividend expected for FY2017.

The FT correctly points out today that the refusal by Brussels of the Hutch/O2 mega-merger will benefit TalkTalk.

All good.

ALL IMO. DYOR.
QP

[1gw] 11/5/2016 17:35

Declared short position.

Odey down again in yesterday's volume.

1.44% 3rd March
1.35% 16th Mar
1.42% 6th Apr
1.51% 21st Apr
1.47% 27th Apr
1.33% 29th Apr
1.27% 5th May
1.15% 10th May

[1gw] 11/5/2016 16:27

Not long to go now.

I thought hard about taking some profit today, ahead of results. I've bought on 9 occasions now (coming back in in October) and now have talktalk as a top 3 holding.

Decided to ride my luck in the end though. Here's hoping for good guidance tomorrow.

[1gw] 10/5/2016 14:47

Some big trades going through today.

[pierre oreilly] 10/5/2016 10:38

Seems to be doing very well ahead of results. Much more comforting than being sold off before results.

This was over 400p pre-hack. We'll probably get some more info on the total cost of the hack, and i don't think the cost will be commensurate with a 140p price difference between then and now.

I've talken a new bb contract with talk, plus been sold an extra phone contract - both times with extra facilities i don't really need (like fibre), but available at such a small extra cost i thouht it worthwhile, I don't suppose i'm the only one who sees the best deals coming from Talk. (And I'm not with talk just because i own the shares - i own sahres in bt, and vod too - but because they give me the best deal for my circumstances). (Having said that, talktalkmobile piggybacks vod).

[bamboo2] 09/5/2016 18:04

1gw, hope so.