Still Nothing To Delight Turkcell Investors

When I last wrote about Turkcell (TKC) in late February, I wrote, “Turkcell still looks undervalued to me, but it also still looks like a potential value trap unless and until the situation in Turkey improves.” And so it goes, with ADRs down another 15% or so, as the Covid-19 outbreak has further sapped investor enthusiasm in emerging market stocks. If there’s a bright side, it’s that Turkcell’s performance over the last three months has been better than at least some emerging market names like America Movil (AMX), MTN Group (OTCPK:MTNOY), Telefonica (TEF), and Telkom (OTCPK:TLKGY), so … yay?

For better or worse, the Turkcell story remains as it was. Management has actually done a good job with respect to drivers like data and digital services, as well as growing fixed-line fiber and IPTV businesses. Overall, the company is shifting toward a richer service mix and one with fewer less-lucrative prepaid subscribers. Still, it’s an emerging market telco in an unpopular country during a risk-off phase of the market, so it’s going to take time before the stock’s apparent undervaluation makes any real difference.

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Still Nothing To Delight Turkcell Investors