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Time To Phone Your Broker About BT Again?

By Malcolm Stacey | Thursday 12 January 2017

Disclosure: I own shares in one or more of the stocks mentioned. I wrote this article myself, and it expresses my own opinions. I am not receiving compensation for it (other than from ShareProphets). I have no business relationship with any company whose stock is mentioned in this article.

Hello Share Nibblers. I took a big block of shares in BT (BT.A) on the recommendation of Alan Green of Brand Communications about four years ago. The stock rocketed soon afterwards, nearly doubling my stake. Pretty impressive for a Footsie member, I think. Then about a year ago, it dived for some reason I forget. And as usual when a ship wobbles I was still aboard. Never mind, I still enjoy a bumper paper profit on the stock, just not one that’s quite a chipper as it used to be. But things are changing.

Once the share breaches 400p, as I expect it to do in the next few days, then there’s no reason why it should not cruise to a new record of 500p. I’m not the only one who thinks so. Morgan Stanley has boosted its own target of 450p to 490p.

The main reason given by the bank is that BT has underperformed the Footsie by 41% in the last year. BT is laden down with a big pension liability and as gilts, a big mainstay of pensions, are getting a bit more valuable (they couldn’t fall much lower) BT should benefit.

The  company does a popular broadband and TV service, and even a Super Scrooge like myself has not found a more reliable provider. OK it’s not the cheapest, but there’s not much in it. 

There is a constant nuisance that the government might force it to give up Openreach, the nuts and bolts bit of telephony, but that was avoided last time. This may, despite noise from its competitors, be kicked into the long grass for ever. 

BT is also a big player in televised sport and we all know how unhealthily obsessed the world is with that monumental waste of time.

You can get happy premonitions about some companies always rising to the top and staying there. And for me, BT is one of them. 

Unlike the Punter’s Return.

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