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BT (BTA, 223p) remains “one of the most hated companies in the UK market”, says Sebastian Lyon of Troy Asset Management – one of our top personal view tipsters of 2005.
It has underperformed the FTSE 100 index by about 10% this year as it is widely seen as being at risk from a growing number of more innovative competitors and from a regulator eager to crack the whip in its direction, says Edward Simpkins in The Sunday Telegraph.
But is it really that bad? Earlier this month, BT seemed to “answer its critics” by unveiling a line-up of consumer-friendly products for 2006, including TV on demand and video calling from landlines.
Also, like its rivals, it’s “riding the crest of the broadband wave”, and although traditional revenues may be falling, they are being replaced by money coming in from the new offerings. “Gadgetry aside,” says Simpkins, there is great appeal in BT’s yield – 5.6% and expected to grow. Lyon would “happily buy BT shares as a low-risk purchase”, and Mark Slater, a MoneyWeek Roundtable regular, is also “happy with BT and would still call it a buy”.
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Annunziata Rees-Mogg
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