The TPG Telecom Ltd (ASX: TPM) share price has been a big mover on Tuesday.
At the time of writing the telco company's shares are up almost 5% to $5.15.
Why are its shares higher?
With no news out of the company, I suspect that this gain could be a relief rally of sorts following today's Telstra Corporation Ltd (ASX: TLS) annual general meeting.
It appears as though some of investors may have been fearing further weakening in the telecommunications sector, but thankfully Telstra reconfirmed its FY 2018 financial guidance.
TPG Telecom isn't the only telco climbing higher today. At the time of writing, the Vocus Group Ltd (ASX: VOC) share price is over 8% higher at $2.64.
Should you invest in TPG Telecom?
Year-to-date the TPG Telecom's shares have lost almost a quarter of their value, leaving them trading at under 11x trailing earnings.
But while this does sound dirt cheap, the company is faced with competitive pressures, lower NBN margins, and high capital expenditures which are likely to weigh heavily on its performance over the coming year.
So with earnings growth unlikely until either FY 2019 or FY 2020, I wouldn't be a buyer of its shares at this point and would class them as a hold no matter how cheap they appear.
In the meantime I would rather focus on one of the many shares on the local market which are exhibiting strong levels of earnings growth currently.
