Bt Share Discussion Threads

[brucie5] 09/5/2020 13:46

I think that's a very fair article, fwiw. While the conclusion will clearly be different for each of us.

[brucie5] 08/5/2020 17:11

careful
8 May '20 - 15:39 - 35465 of 35466
0 1 0
Reading Daily Telegraph today made me feel better.
-----------------------------
Reading the Daily Telegraph never makes me feel better.
But I'll make an exception in this case.
;)

[loganair] 08/5/2020 15:42

6G is expected to be rolled out around 2030 and may deliver speeds of up to 1TB per second.

5G is being rolled out at 1GB per second, then slowly ramped up to 10GB per second, therefore 6G is expected to be 100 times faster then 5G as 5G was expected to be 100 times faster then 4G which plainly it isn't as 4G was expected to be 100 times faster than 3G.

[brucie5] 08/5/2020 15:24

"But shareholders themselves, once they’ve overcome the shock of another downwards lurch in the share price, ought to view the reset positively. Assuming the last pieces of the regulatory fix fall into place, Jansen sees BT making a pre-tax return of 10%-12% on its fibre investment. The return is not without risk, but the terms are decent for infrastructure that could be used for half a century."

[loganair] 08/5/2020 14:56

As I posted yesterday, just when BT has completed their £12bln of Capex on putting in super fast 5G - 6G will come along that will require another £12bln Capex being spent by BT making the £12bln spent on 5G becoming more and more redundant.

It seems to me every 5 or 6 years BT needs to spend £12bln on Capex just to stand still.

[milliethedog] 08/5/2020 14:41

Good read, from over on LSE board

[loganair] 08/5/2020 13:30

How many times have I seen company A take over company B only for company A to write down the value of company Bs goodwill and intangibles by 50%.

Vodafone took over Mannesmann for €187bln while at the time Vodafone had a market cap of around £100bln = £230bln making Vodafone the 4th most valuable company in the world at the time and now at the beginning of the year before the stock market went down Vodafone was only worth £40bln.

Over the years Vodafone has written down the goodwill and intangibles of Mannesmann by £40bln.

[brucie5] 08/5/2020 12:57

Interesting point about 'intangibles'. Presumably at height of dot.com every massively overvalued tech co was intangibly wealthy with possibility. It is surely a form of confirmation bias where past success is used as credit to underwrite expectation of future success, on the premise that the past really is a reliable guide.
It is not. That's why you get 'mountain' chart formations like BT's.
That said, if you're going for a brand you can rely on, yes, BT has huge recognition and therefore most likely to be the supplier chosen by passive customers... like me. So long as I have someone to speak to and a company that won't be gone tomorrow, and the tariffs are reasonable I really don't want to waste my time 'shopping around' for bargains.
So at this point in the cycle, I'd venture that those intangibles are worth paying for. But not so much at the peak end of the cycle, as we've seen.
In this regard, I also think Careful's posts re. differential between BT and OCDO are instructive. We are willing to give huge 'intangible' goodwill to the latter.

[careful] 08/5/2020 12:41

buy well

Negative net asset value is not unusual if we ignore intangibles.

Current darlings of the FTSE100 Unilever and Reckitt are hugely negative net assets if we ignore intangibles.

When BT takes over EE. many condsidered it to be a great move.
EE. had a market value well in excess of its physical assets.
The difference is entered as 'intangibles'.

Consider retailer Next or a brand like Coca Cola or Manchester United.

The brand, not the assets are where that value is.
Intangibles are important.

[brianbrain] 08/5/2020 11:34

Wrong thread cantre. I panicked there for a second as I thought you had got into BT. That would have been a sell signal if ever there was one!

[cantrememberthis2] 08/5/2020 11:06

Another consideration
Does a £58m impairment for COVID19 (approx) justify £208m drop in share price?

[roundhowe] 08/5/2020 11:05

Brucie5...thanks for the reply. Please post a link(URL)....if poss.

[brucie5] 08/5/2020 10:46

Roundhowe, I'm not qualified to comment, but I suggest you read his entire posts on LSE rather than than simply dismiss an excerpted version from me. I think his greater point was not that there would be no further progress, but that BT might be closer than is commonly thought to the end of the heavy investment cycle on infrastructure, as cloud based IOT is likely to be the next revolution. But I'm really out of my depth there.

Poikka, I think it's probably because the last IC reccy was a hold... at levels twice those of yesterday's close. Iow, they know they didn't know; and now the best they can do is to say they haven't got a clue.
We'll know when this 'mountain reversal' is truly upon us when everyone turns bearish, or at least, like the IC, non-commital, and no one can find a single redeeming feature in what's left.
Yet what's left, is surely the value.
It may well go below £1 yet, in which case the PE will shrink closer to 4, which is absurd, I will add to trade. But I'm minded to think that £1 is the base.

[roundhowe] 08/5/2020 10:42

Brucie5...many thanks for posting Fleccy's PoV:

"We really are reaching the limit of our technological capability and as I've mentioned many times there's not much further to go."

Just rubbish. Actually, much worse than that....real garbage. He's not even thought about satellite connection....which might be in 6G or might follow after that!

Reminds me of IBM's original assertion that the world only needed a handful of computers.





"What will 6G be like?

There is some debate about what 6G would entail, and whether indeed it’s relevant to consider the term, as user requirements will change greatly in the next 10–20 years.

A high-level answer is that 6G will explore and include relevant technologies that will be left out from 5G, due to being “too late”, experimental in status or simply outside the defined scope for 5G. Future applications and technologies will be integrated when they achieve maturity.

For 6G, one proposal is to integrate terrestrial wireless with satellite systems, for ubiquitous always-on broadband global network coverage."

[poikka] 08/5/2020 10:26

Yup, 150p within the year - he said, again, for the doubters.

[poikka] 08/5/2020 10:25

IC - ".On top of the dividend hiatus, the group has shied away from providing full-year guidance."

That was pretty poor journalism, "shied away from.."; of course they're not giving full year guidance, no-one can.

[brucie5] 08/5/2020 10:12

Thanks, David. Just to add, I see that the IC have it as a 'hold' this weekend, while describing the modernisation programme as 'promising'. It also notes that,
"...On top of the dividend hiatus, the group has shied away from providing full-year guidance. For now, we continue to watch from the side-lines."
I think that pretty much captures what most investors will be thinking. So in hindsight, yesterday's buyers (like me) will either prove to have been premature or lucky.

[davidbennett] 08/5/2020 09:26

Very good appraisal Brucie5 - thank you. I agree the income investors will be replaced by capital growth investors and referring to a previous post, the volume yesterday is extremely positive as it shows that a lot of weak holders were replaced by firm longer term holders. Plus a lot of shorts may have been closed. Onwards and upwards from here, that is, once we find that elusive bottom which is very close to this point. One of the best investment opportunities IMO.

[brucie5] 08/5/2020 09:00

The chart looks very oversold to me, given that even the 50sma is somewhere above 1.20, and the 200 over 1.60. That suggests to me that any bounce from here could have some way to go without challenging the downwards trajectory. However, as yet there is no technical base to see, except the £1 threshold, which may/may not hold. I have no doubt any capitulation through that would see a lot of buyers coming in with large positions in expectation of a bottom. So if not yet there, I think we're very close. Remember, the stockmarket is a discounting machine... it looks ahead. So yesterday's drop on the dividend cut was in anticipation of market worries. But what if BT had not cut the dividend? How would that have impressed/persuaded its doubters?

There's some very interesting coverage on LSE in the meantime, particularly by Fleccy, who seems to know whereof he writes. Of which here's a taste:
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*Once the 5G and FTTP investment is out of the way and with the projected cost cutting program saving £2 billion annually by 2024, Net profit could increase significantly once the upgrades are completed. After 5G and FTTP is done, I don't see where networks can go from there, 5G will blanket the country with cells and FTTP will allow more bandwidth than customers will ever be able to utilise. The media have been making hay about the constant upgrades to telecom networks and there have been lots, but we're reaching the end of the road for upgrade cycles. In the past 35 years, we've had PDH, SDH, DWDM on the transmission side, various digital exchange products and the evolution of IP networks. On the mobile side 2G,3G, 4G and now 5G. Data and voice are now converging onto the IP cloud networks, DWDM over Fibre can carry multiples of Terabits over single Fibres and 5G has been developed for IOT, not you and me specifically. We really are reaching the limit of our technological capability and as I've mentioned many times there's not much further to go. Future development will be around IOT and end user services and devices, but Telecom evolution is close to its peak. 6G will likely be used for large areas, like shopping centres, Railway stations and Stadiums and will be an extension of 5G. Once the current upgrade cycles complete, it will just be Equipment replacement and maintenance required, end of the road.*
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It seems to me that BT has been given cover by the present market to do what had to be done, and should have been done some time ago; moreover, the pain to be experienced by income seekers who will now leave will in due course be replaced by the need among growth investors (some also seeking replacement to their lost income) for situations that combine growth with low risk of wipe out. BT is highly unlikely to face the latter. And currently sits on a PE of just below 5, implying 20% earnings yield, all of which is now flowing back into the company.

Anyway, no doubt we'll see lots of analysis of this in due course, but so far analysts/commentators have mainly got it wrong, so bear that in mind also. I still believe that this tech behemoth forced into effective action to put its house in order is capable of rising again.

[diku] 08/5/2020 08:42

That is a lovely text book mountain reversal chart...morale of story is out of the 10 year period one has to catch the start of the up move which is around 3 - 5 years and take profits...and then sit it it out for the following 3 - 5 years down move and don't catch a falling knife or try to over trade...you get the odd technical bounces once a year from oversold levels if timed near correctly...banks probably similar charts...and no doubt lots more...

[nw99] 08/5/2020 06:25

Pension deficit 5.2b