The Vocus Group Ltd (ASX: VOC) share price is on course to finish the week with a day deep in the red.
At the time of writing the telco company's shares are down almost 6.5% to $3.12.
Why is the Vocus share price tumbling lower?
With no news out of the company, today's decline is a bit of a mystery.
However, it is worth noting that the Vocus share price has been on fire over the last six months and absolutely thumped the ASX 200 and its peers.
Prior to today, the company's shares were up 33% over the period. This compares to an 11.5% decline by the benchmark index, a 5% gain by the Telstra Corporation Ltd (ASX: TLS) share price, and a 20% gain by the TPG Telecom Ltd (ASX: TPM) share price. The latter's gain has been driven largely by its plans to merge with Vodafone Australia.
Why has Vocus outperformed?
A better than expected full year result in August has been a key driver of its strong share price return over the last six months.
In FY 2018 the company reported a 4% increase in revenue to $1.9 billion and a 7% lift in underlying EBITDA to $360 million.
While underlying NPAT for the year declined 17% to $127 million, it is worth noting that this means it had a stellar second half. In the first half Vocus reported NPAT of just $37.3 million, which was down significantly on the prior corresponding period.
Should you invest?
I was impressed with the way the company performed in the second half of FY 2018, but I think the post-results rally means its shares are fully valued now.
Though, it will be worth keeping an eye on the ACCC's decision on the proposed merger of TPG Telecom and Vodafone Australia. If that goes ahead it could make trading conditions easier in the telco space and lift the margins of Vocus, possibly justifying a higher valuation.
But until then, I would suggest investors wait for a better entry point further down the line.
