At first glance you could be forgiven for shying away from stellar performing TPG Telecom (TPM), after all the telco is not only trading at a premium to its peers but well ahead of Skaffold’s forecast intrinsic value estimates. Conventional value investing wisdom would suggest letting the stock cool its jets rather than buying in at current levels.
Revelations that TPM will go head-to-head with the NBN - hence removing the need to lease Telstra’s copper network for last mile access - was even more favourably received by the market than its better than expected $149 million full year net profit after tax (NPAT).
TPG’s share price is now at a substantial premium to Skaffold’s intrinsic value estimate. Given its positive outlook, is TPG a buy, sell or hold?