Is the Telstra Corporation Ltd (ASX: TLS) share price a buy after this week's market sell-off?
The large telco has seen its share price drop over 5% over the past two days as investors worry about President Trump's latest actions regarding trade and tariffs.
It's amazing how much effect one person can have on the global economy and the share market. But here we are.
We can now buy Telstra for 5% cheaper than before because of the volatility. Is Telstra worthy of a buy?
NBN changes
Well, one good thing that's happened recently is that the NBN have improved the speed and access for telcos like Telstra for no extra cost.
What that means is that customers will get a faster service and Telstra's profit margins are likely to improve a little.
Of course, Telstra would have preferred it if the NBN had gone even further, but it's an improvement for Telstra.
Telstra has previously warned it has only gone through half of the financial pain of the move to the NBN.
InfraCo
Telstra is making good progress on its InfraCo division – it has a CEO and management team to maximise the value of this division.
Having InfraCo means that the division can play a part in the privatisation of the NBN if that's what ends up happening.
I think it's a good idea that Telstra has separated these assets so it can get a good price for it if management ever decide to divest this business.
Is Telstra worth buying?
The telco is doing what it needs to do to cut costs and invest for 5G. New technology will require a lot of data, but I'm not sure how much of the value Telstra will be able to capture.
It's trading at 19x FY21's estimated earnings with a grossed-up dividend yield of 6.2%. This doesn't attract me, I like to invest in businesses where the earnings are going up not backwards.
