I'm wondering what your thoughts are regarding Telus' reducing 2023 guidance. I've had it for a while and while price is under my buy in as of today's drop, dividends cover that. Do you think the reaction today is overdone, or is it time to move to something more profitable? I'm an active investor, so tend to follow the momentum. I am concerned T has been steadily losing momentum since last May 2022 and am thinking with this change in fundamental outlook, that trajectory will continue for a while. Dividends are nice to have, but are not worth having if the stock's price continues to deteriorate. It would be interested to know what you would suggest as a replacement at this time? BCE, NVDA, GOOG, MSFT, WSP, Cdn banks are all currently owned, no Health Care exposure and what seems like too much energy exposure lately. Add to something? Find something new? Cdn or US doesn't matter. Sorry - lots of questions here, so deduct accordingly.
Dawn
The recent news from TIXT was certainly disappointing and caused T to revise its consolidated operating revenue growth estimates from 11% to 14%, to 9.5% to 11.5%, and Adjusted EBITDA growth from 9.5% to 11% to 7% to 8%. Telus noted that it reports TIXT's results through its Telus DLCX operating segment, which in Q1 2023 represented 10% of Telus' consolidated Adjusted EBITDA. T is optimistic that TIXT will turn things around with optimizing its own cost structure and deploying automation to drive down its cost to serve. T reported strong growth numbers for its phones and connected devices, but investors remain wary on the name due to its reduced guidance.
Historically, we have preferred T over BCE for growth, however, due to recent events, we feel that the playing field is likely leveled out. Due to the recent uncertainty, we would be comfortable with a switch to BCE, but with a long enough timeframe, we feel that T can see a bounceback if TIXT is able to execute on optimizing its cost structure and if the macro headwinds eventually become tailwinds.