Telstra has a market cap about 20x Vocus, but they provide similar fixed line Internet.
The industry has had some dramas in the last years, each company has had their own, but the share price ratio between them is stabilising and narrowing.
I believe Telstra is behaving as an anchor for the industry, and Vocus is being range traded relative to Telstra's price.
I would normally expect the TLS:VOC ratio to fall back toward the median trend in the short term, however there are operational events in play, the ASC project is preparing to go live, and the competing cable it aims to replace has reported a fault, which could significantly drive signups in the next month.
ASC has been a significant investment for Vocus, and there was some perceive risk associated with it due to the increase in debt required to build it, a successful launch with good long term revenue from the project could significantly reduce the companies risk profile.
OTOH, It will take a significant and sustained effort to break through the ceiling and maintain share price parity with TLS.
The industry has had some dramas in the last years, each company has had their own, but the share price ratio between them is stabilising and narrowing.
I believe Telstra is behaving as an anchor for the industry, and Vocus is being range traded relative to Telstra's price.
I would normally expect the TLS:VOC ratio to fall back toward the median trend in the short term, however there are operational events in play, the ASC project is preparing to go live, and the competing cable it aims to replace has reported a fault, which could significantly drive signups in the next month.
ASC has been a significant investment for Vocus, and there was some perceive risk associated with it due to the increase in debt required to build it, a successful launch with good long term revenue from the project could significantly reduce the companies risk profile.
OTOH, It will take a significant and sustained effort to break through the ceiling and maintain share price parity with TLS.
코멘트:
(didnt mean the SP to be linked, meant it to be Share Price)