BCE Inc T.BCE

Thoughts about window dressing playing a part in the Telco's

[cttglvr]

I am wondering what everyone thinks of the concept that window dressing from various funds has added to the downward pressure on telco's. I copied the following to clarify what the term means.

Window dressing

Trading activity near the end of a quarter or fiscal year that is designed to
improve the appearance of a portfolio to be presented to clients or 
shareholders. For example, a portfolio manager may sell losing positions 
so as to display only positions that have gained in value.

Just for fun I looked into BMO's covered call ETF ZWU. I owned this for several years but sold in 2023 after they cut the distribution. Lo and behold there isn't a single Canadian Telco in ZWU's top 10 holdings. I know last year there used to be. So what do you think the top holdings are now? Pipeline stocks are 4 of the top 5 holdings. TRP, PPL and ENB. Remember last year when the pipelines were getting crushed but have since recovered 10 to 20% from their lows? It may take a month or a quarter or more but I believe the telco's will come back into favour again.

Flashback to last year. ENS is my now largest holding which is a split share based solely on Enbridge share price. At the Enbridge's low guess what the dividend was? 8.7%! The news was full of articles slamming pipelines...too much debt....no growth...bad leadership...likely have to dump assets at fire sale prices. What happened then? These stocks all caught bids and up they went and the media moved to pick on another asset class.

It sure doesn't help with articles in the Globe etc spreading fear about the telco's as that's what sells...just like they did with the pipeline stocks last year. For some that are new to investing or just reading headlines they panic and sell.

There are a couple of posters here that really should be in GIC's as they seem to panic on minute to minute stock price swings. I have a full position in BCE at about $49.50 and will add but I want to see a base first. By November or so if I don't see a turnaround ( I think we will to the upside) I can sell BCE and take the capital loss plus dividends in my non-registered account. After 30 days I can buy it back or move into Telus.

I'm happy to hear what other posters feel about my possible theory.

JMHO

[newcoin]

Who knows? What you're thinking is a definite possibility.

[cttglvr]

The new quarter starts this week. The next couple of weeks may be interesting. I'm going to check 2 or 3 Utility ETF's to see if any Telco's show up in the top 10 holdings and if they trade higher than normal volumes even without much of a move up. I'd be happy with sideways movement on large volume forming a solid base for now. ZWU holdings I referenced were as of March 28/2024

[autofocus111]

Well we'll know soon enough if that was the case. Maybe this isn't finished and it's an H1 play as opposed to just Q1. Covered call writers who expected a prolonged negaitve stock move could have sold in-the-money calls. I added more shares at ~46 this week. I'm a long time holder of BCE.