Monday, March 2, 2020

Turkcell Remains A Good House In A Very Unpopular Neighborhood

Not only is emerging market telco a largely out-of-favor sector, but Turkcell (TKC
) also continues to be hurt by the relative unpopularity of Turkey as an investment destination. I’ve discussed the many and varied issues with Turkey in prior articles and I won’t rehash that here other than to say that there remain substantial valid concerns about the health of Turkey’s economy and the quality of the government. Even so, Turkcell continues to execute well, with strong performance in the consumer post-paid and fiber businesses.

Turkcell still looks undervalued to me, but it also still looks like a potential value trap unless and until the situation in Turkey improves. Positive ongoing execution will certainly help sentiment, and the dividend outlook is likewise good, but even if Turkcell is one of the best options in Turkey today, that’s only worth so much.

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Turkcell Remains A Good House In A Very Unpopular Neighborhood

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