michael feller rates m2 one of dozen buys, page-5

Hi

The article is the diminutive dozen.

If $30 million is too small for you, a slightly larger but nevertheless nimble business-to-business telco is M2 Telecommunications. Lincoln Indicators chief executive Elio D'Amato says the network-independent reseller passes his fund's stringent financial health metrics and has a proven track record of growth via earnings accretive acquisitions, including, most recently, Commander. "This well-placed telco looks undervalued at current prices," D'Amato says.

Lincoln has a $4.17 valuation on the company, against a $4.35 average target price from brokers in the market. While Telstra has barely returned 4% per annum including dividends, over the past five years, M2 has produced a tremendous 68% return with, in some periods, an even better yield than Telstra's. At current prices, it is forecast to produce a 4.4% dividend for the year to June.

And for those reading Robert Gottliebsen?s article today (click here), both M2 has a very strong futures despite the risks of the NBN to the sector as a whole.