Australia's 1.4 million shareholders in Telstra Corporation Ltd (ASX: TLS) recently enjoyed a very pleasing Christmas present when their company's share price rallied to a 13-year high of $6.05 on the 23rd of December.
It's still a far cry from the $9.20 level reached back in February 1999 but it's certainly a whole lot better than the $2.55 low that the stock sunk to in November 2010!
The recent gains have been spurred along by a flurry of corporate activity at the telecommunications (telco) company in recent months. Amongst the initiatives has been –
- The signing of a revised definitive agreement with NBN Co which is expected to deliver an equivalent estimated $11 billion in post-tax net present value (as at June 2010) to the company.
- The $857 million dollar acquisition of Pacnet. Pacnet owns a network of data centres, networks and undersea cables throughout Asia.
- A $1 billion off-market share buy-back.
- And the US$270 million investment in Silicon Valley-based video streaming and analytics group Ooyala which boosted Telstra's shareholding from 23% to 98%.
These strategic manoeuvres along with the strong cash flow generation have the potential to drive further growth – particularly in Asia – for the group in 2015 and could drive the share price post new highs in 2015.
While Telstra is by far the largest and widest owned telco stock in Australia, a number of Telstra's competitors also registered strong share price appreciation and new highs over the course of 2014. Amongst the top performers last year were Amcom Telecommunications Limited (ASX: AMM), TPG Telecom Ltd (ASX: TPM) and iiNet Limited (ASX: IIN) which gained 38%, 32% and 24% respectively.
