Mantra Group Ltd (ASX: MTR) shares, TPG Telecom Ltd (ASX: TPM) shares and Vocus Group Ltd (ASX: VOC) shares have been whacked.
Mantra, TPG and Vocus share price
As can be seen in the chart above, these three companies have been sold off over the past year. However, what's interesting to note is that these three companies are growing.
Yep, that's right. They have increased their profits in recent times.
Vocus Group
Vocus is perhaps the highest risk of these companies, but it could have the most upside potential from today's prices. Vocus is the owner of retail telco brands like Dodo, iPrimus, Commander, Slingshot and much more. It also owns infrastructure assets and names like Amcom and NextGen.
Integrating two companies is never easy. But Vocus took it a few steps further. After it bought Amcom, it bought M2 Group (which included many smaller companies) and then bought NextGen — all within a few years.
Shortly after the purchase of M2 Group, Vocus' founder and Chief Financial Officer made a dramatic departure. Adding fuel to the fire of uncertainty, Vocus was and is also dealing with the rollout of the NBN, although it is expected to be a net positive.
If Vocus can wrap all these companies together in a new low-cost telecommunications and energy retailing heavyweight, with backbone infrastructure, its shares could look cheap in five years time. But that might be considered a pretty big 'if'.
TPG Telecom
This telecommunications company has also been sold off in recent times, as fears of slowing growth took the limelight. TPG is the owner of the low-cost broadband and home phone provider and iiNet.
Yesterday, the company announced it was successful in buying mobile spectrum. To fund the rollout of its 4G network, the company will take on debt and sell new shares to existing shareholders, including its CEO and one major shareholder, at a very very steep discount to current share prices.
The deal has spooked the telco market, but it could be rewarding for TPG shareholders in the long-term.
Mantra
Mantra is the leading hotels and resorts operator, which owns Mantra, BreakFree and Peppers. The arrival of Airbnb is expected to hurt the company. However, with its share price down from over $5 to below $3, I'm beginning to think the selloff may be overdone.
For its dividend and the long-term appeal of increasing tourism, Mantra shares are firmly on my watchlist.
