In today’s briefing:
- NTT (Buy) – Some Quick Takeaways from the Subsea Cable Announcement
- Simply Returning Profits to Shareholders Will Increase Gap in Valuations Among Companies
NTT (Buy) – Some Quick Takeaways from the Subsea Cable Announcement
- NTT announced it would build and operate a third trans-Pacific subsea cable (JUNO) with NEC as the vendor and a 2024 activation date
- This also represents the second trans-Pacific cable in five years and the one with the highest capacity to date
- This is not core to NTT’s business but it does highlight how capacity needs are expanding as network speeds accelerate and how those costs can be managed
Simply Returning Profits to Shareholders Will Increase Gap in Valuations Among Companies
- It can be said that companies that do not specify cash allocation and only execute shareholder return, thus encouraging shareholders to find and invest in reinvestment targets on their own.
- Since the stock valuations of companies as a whole haven’t increased, investment capital has gone to a few companies with high profitability, raising gap between profitability and valuations among companies.
- If the information asymmetry between management and investors could be bridged, even changes in the capital structure could have an impact on stock prices.
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