Preoccupation with Telstra ongoing

The world is preoccupied with Telstra 2 – or so it would seem.

Most questions directed at advisers and planners in the last two or three weeks have revolved around whether investors should take up the offer to buy shares in the second float of Telstra.

In the last twelve months the company has increased its earnings per share by 16.3 per cent to 27.1 cents, increased total revenue to $18.2 billion and increased total operating profit after tax by 16 per cent to $3.5 billion. These factors suggest that the company has performed strongly in the past year.

There have also been announcements by Mr Switowski that there will be

further cost cutting measures to raise the bottom line by around $2 billion, lending credence to the argument that Telstra will continue to perform well.

Telecommunications is an industry many advisers recommend as being represented in their clients’ portfolios.

As the stock will represent approximately 12 per cent of the All Ordinaries Index at full price, Telstra has a powerful argument for consideration.