A: Thanks for the question.

We were wrong on Telstra.

The market is viewing the company as “ex growth”, is concerned about a potential revenue hole post the NBN, and fears that some of the technical outages that Telstra had earlier this year will impact customer retention and undermine its key competitive positioning – network reliability.

The brokers remain neutral to negative, with 5 holds and 3 sells. Due to Telstra’s recent share price performance, the consensus target price of $5.12 is now about 8% higher than the current share price. It is trading on a multiple of 13.7 times FY17 earnings, 13.1 times FY18 earnings, forecast dividend yield is 6.7% plus franking credits.

Am I selling at $4.71? No, I think the stock is fundamentally cheap and I don’t need the cash..

Will it go up in the short term? Probably not – it is just out of favour, and while bond yields are rising, it will stay this way. If the bond market steadies, expect to see some more value hunters.

My advice – hang in there, but if you want some stocks to move with the market in the short term, it is probably not Telstra.