What Happened to TPG Telecom Ltd’s Share Price?
Shares in cut-price internet service provider TPG Telecom Ltd [ASX:TPM] continued their strong run today, rising by more than 3% to handily outperform the flat Aussie stock market.
TPG shares have blasted well-beyond April’s previous all-time high. At $7.28 per share, investors in this stock have now enjoyed a capital gain of nearly 65% over the last 12 months.
Why Did This Happen to TPM Shares?
A strong full-year profit result reignited TPG’s share price performance on Tuesday. The company achieved earnings before interest, tax, depreciation and amortisation of $364 million…$10 million more than analysts’ consensus expectation.
This is the sixth year in a row that TPG Telecom has boosted both earnings and dividends. That’s an enviable record.
Today pay TV provider Foxtel took the market by surprise, announcing that it will license some of its channels to TPG Telecom from early next year.
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Content providers are racing against time to set up low cost entry-level pay TV services before US juggernaut Netflix Inc [NASDAQ:NFLX] hits our shores.
Licensing quality content is mission-critical for any aspiring entertainment provider. Today’s news de-risked TPG’s push into entertainment and gave investors a reason to bid up its share price.
What Now for TPG Telecom Ltd?
There’s a lot to like about TPG’s prospects from here. The company has proven its capability to grow earnings in a highly competitive market. What’s more, today’s content deal shows that TPG is nimble enough to launch a pre-emptive strike against its rivals.
TPG Telecom should continue to reward telco investors who are happy to take on a riskier stock for the prospect of stronger share price performance.
Cheers, Tim Dohrmann+
Small-Cap Analyst, Australian Small-Cap Investigator
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The post Why the TPG Telecom Ltd Share Price Surged Today appeared first on Stock Market News, Finance and Investments | Money Morning Australia.
