Sunday, April 09, 2006

Of Trading, Options and investing 2


After knowing how to buy a stock, I needed a target, i.e. what stock to buy? Searching around, I read an article publised by Morningstar about 5 5-stars stocks in the telecommunications sector. As usual, most of them are listed in the NYSE and the DowJones, except for one: France Telecom. My first reaction is downright hostile: People living in France knows that France Telecom had been through tough time because the fixed line/mobile telephone service and broadband service in France, hitherto protected from competition is being liberated. Competitors like neuf telecom, bouygues telecom, SFR are having a field day. Their appaling customer service does not help either.

After digging deeper, I found out that most of the problems plaguing them are represented already in their relatively cheap stock price: They are trading at around 18€ against 30€ for a 52 week high. French current finance minister Thierry Breton was formally chairman and chief executive of France Telecom, it was he who started the painful reforms and restructurings in France Telecom before being called to serve in the cabinet. His successor seems competent enough to carry on his reforms and a series of layoffs in France Telecom. France Telecom has also assets in Central and Eastern European countries like Poland and Slovakia, and which is precisely where I believe strong growth will happen in the next 5 to 10 years.

to be continued...

-gAvIn-

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