Sell your Telstra shares to buy these ASX tech shares: Bell Potter

Telstra out, tech stocks in. Here’s what this broker is saying about the telco giant.

| More on:
A woman looks at a mobile phone as various screens appear nearby.

Image source: Getty Images

You’re reading a free article with opinions that may differ from The Motley Fool’s Premium Investing Services. Become a Motley Fool member today to get instant access to our top analyst recommendations, in-depth research, investing resources, and more. Learn More

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.

Motley Fool contributor James Mickleboro has positions in Life360 and Xero. The Motley Fool Australia's parent company Motley Fool Holdings Inc. has positions in and has recommended Life360, WiseTech Global, and Xero. The Motley Fool Australia has positions in and has recommended Telstra Group, WiseTech Global, and Xero. The Motley Fool Australia has recommended Cettire. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

More on Broker Notes

A young man wearing a black and white striped t-shirt looks surprised.
Materials Shares

These ASX lithium shares could rise 30%+: analysts

These lithium shares have been tipped to smash the market.

Read more »

Two astronauts stand on the moon, indicating a rocketing share price
Financial Shares

2 ASX finance shares (not the big banks) Celeste is riding to the moon

These stocks could be a handy way to cash in while consumers and businesses are struggling with high interest rates.

Read more »

Young woman using computer laptop with hand on chin thinking about question, pensive expression.
Financial Shares

Are Suncorp shares a buy after its FY23 results?

Should you be buying Suncorp shares? Let's find out.

Read more »

A male sharemarket analyst sits at his desk looking intently at his laptop with two other monitors next to him showing stock price movements
Consumer Staples & Discretionary Shares

Here’s what a top broker is saying about A2 Milk shares

Is this infant formula a buy? Let's see what a top broker is saying.

Read more »

A woman sits on her lounge in front of her laptop looking concerned.
Bank Shares

Own CBA shares? Broker warns that profits won’t reach FY23 levels again until 2028

Are the next few years going to be tough for Australia's largest bank?

Read more »

Two boys in business suits holding handfuls of money
Small Cap Shares

‘Very strong’: 2 small-cap ASX shares to buy that you’ve not been thinking about

If you want to beat the market, you need to think differently. Here are the stocks Glenmore Asset Management is…

Read more »

A female executive smiles as she carries out business on her mobile phone.
Broker Notes

Top brokers name 3 ASX shares to buy today

Lithium and tech are on the menu this week.

Read more »

A male sharemarket analyst sits at his desk looking intently at his laptop with two other monitors next to him showing stock price movements
Retail Shares

3 ASX retail shares just upgraded by a top broker

One top broker says all three of these ASX retail shares will rise from here.

Read more »