The Telstra Corporation Ltd (ASX: TLS) share price has been punished, falling 23% over the past year.
TLS share price
Telstra shares have fallen 23% over the past year, compared to the market, or S&P/ASX 200 (INDEX: ^AXJO) (ASX: XJO), which is up 9.5%!
Are Telstra shares in a bear market?
Generally, a market 'crash' is taken to be a fall in prices of 20% or more, before they bounce back. A 'correction' is a 10% fall.
However, rather than trying to determine if Telstra shares are in a 'bear' market, the more important question is…
Are Telstra shares good value?
Telstra shares are forecast to pay a dividend of 7% fully franked. That's highly appealing to many investors, but especially income-seeking investors and those with a self-managed super fund (SMSF).
However, there is a difference between price and value, which all investors must pay attention to.
Despite Telstra shares falling steeply, I do not believe they are a bargain right now.
With TPG Telecom Ltd (ASX: TPM), Vocus Group Ltd (ASX: VOC) and dozens of other competitors on the NBN trying to snatch some of Telstra's business, I think investors need to carefully consider the risks. Then, we should be patient and wait for a healthy gap between its share price and valuation – in spite of the dividend yield.
Foolish Takeaway
Telstra shares may be in a bear market and offering a big forecast dividend, but it is not yet a bargain investment. If its share price falls below $4, my interest will pick up once again.
