Telstra Group Ltd (ASX: TLS) shares are a popular option for investors and are found in countless portfolios across the country.
But one leading broker has made the bold call of telling investors to sell the telco giant and use the funds to buy a group of ASX tech shares.
What is being said about Telstra shares?
According to a note out of Bell Potter, its analysts believe that Telstra is slowly losing its network advantage and fear that this could put the company’s dividend under pressure in the future.
In light of this, its analysts feel investors should switch out of Telstra shares and into founder-led ASX tech shares with large addressable markets.
The ASX tech shares the broker likes are online luxury retailer Cettire Ltd (ASX: CTT), location technology company Life360 Inc (ASX: 360), logistics solutions company WiseTech Global Ltd (ASX: WTC), and cloud accounting platform provider Xero Limited (ASX: XRO). (The latter now has its founder on the board.)
The broker commented:
I am recommending founder led technology platforms that have global addressable markets. WiseTech, Xero, Life360 and Cettire are my key recommendations. I recommend my clients sell Telstra to fund these purchases. TLS’s network advantage is being chipped away by new technology on a daily basis and I doubt the sustainability of the dividend over the medium-term.
This is NOT about recommending unprofitable tech. I recommend highly profitable, highly free cashflow generative, net cash, scalable global and local technology platforms who are increasingly dominating their given segment. These are the business you use in daily life. You can argue now they are actually consumer staples.
Telstra shares are up 0.25% to $4.25 today.