Sunday, January 1, 2012

Turkcell is still a buy: Doubling down

Turkcell fundamentals and balance sheet are even better than before, and the price even cheaper. Turkcell has seen significant growth in Central Asia and Eastern Europe. Due to a currency collapse, the Belarus subsidiary has been written down to a negligible value. Growth of profits from smart phones has been increasing on track to bring new growth. All of these items make Turkcell more and more attractive.

The Achillies Heel of TKC is the foreign shareholder versus domestic shareholder power struggle that has been ongoing since TeliaSonara bought a controlling share of the company in 2005. Collateral damage to shareholder occurred in 2011 with the foregoing of the dividend payment due to the inability to agree between the two major shareholder factions.

Who knows when these issues will resolve? But the deep value of Turkcell makes this investment worth the wait. Thus the author is doubling down on the Turkcell investment at $11.78.


Lockstep said...

There are some risk events coming to Turkcell by the end of the year. Specifically the courts are expected to resolve the shareholder dispute regarding Turkcell, or they may not. If it is not resolved, I could see the stock falling again due to the ambiguity regarding the shareholder governance.

Thus I will close out the position I bought at $11.78 here at $15.33. I have one position remaining in TKC that was initiated at $15.


Great post on tukkcell