The FTSE 100 might have hit fresh all-time highs earlier in February, but that doesn’t mean all its constituents are flying high. For a variety of reasons, there are some that could be perceived to be cheap shares right now. Yet just because a share price might look attractive, more research needs to be done to try and spot red flags. Here’s one that I feel investors should consider and also one I’m steering clear of.

Changes are coming

Let’s start with the one that I believe is cheap. I’m talking about BP (LSE:BP). I wrote about the stock earlier this month following a share price rise after news of a large activist hedge fund taking a stake in the business. The 7% jump with Elliott Investment Management getting involved shows investors are happy about a possible restructuring and strategy changes that will be pushed for in the coming year.

Such changes are needed, with the recent 2024 annual results showing a sharp profits drop. The share price might only be down 5% in the past year. But at 447p it’s well off the 52-week highs of 540p and even further off all-time highs! So, from that angle, some would consider it to be cheap.

Another reason it could be an attractive value purchase is because Elliott clearly see long-term value here. BP CEO Murray Auchincloss announced plans to “fundamentally reset” BP’s strategy, which should help to unlock more profitability going forward. Coming changes include abandoning previous goals of reducing oil and gas output. It’s also looking to fund more profitable oil projects in places like the Middle East.

One risk is that the strategy shift doesn’t go to plan. In that case, the company might still be undervalued, but it could need another shift in direction before finding the right lane to move into.

Numbers not adding up

On the other hand, I’m not convinced that Vodafone (LSE:VOD) is the bargain that some people think it is. The stock is flat over the past year, but is down a whopping 57% over the past five years.

I struggle to see the share price rallying any time soon for a few reasons. To begin with, it’s laden with debt. The latest half-year report showed net debt at €31.8bn. Although this was a fall from the previous year’s €33.2bn, it’s still very high. For perspective, it made a half-year profit of €1.2bn!

Another factor is that the business isn’t really growing. Full-year 2024 revenue fell 2.4% versus 2023. We’ll have to wait and see in May for the next round of reporting, but I struggle to see revenue materially growing. As a result, the share price is unlikely to rally until revenue (and profit) start to tick higher.

Despite my concerns, it’s true that the dividend yield looks very attractive. Even with the recent dividend cut, a 5.63% yield is generous. Some might be happy to own the stock to pick up income and wait for a long-term recovery in the stock. But I’m keeping away and won’t be investing here for the foreseeable future.

A £10,000 investment in Diageo (LSE:DGE) made 12 months ago would have a market value of £7,340 today. That’s probably not the result investors who bought the stock were looking for.

There is however, a more positive way of looking at it. Right now, there’s a chance to buy shares that were trading at £29.85 a year ago for £21.91.

Dividends

When evaluating Diageo, it’s important to account for the dividend – investors who owned the stock for the last 12 months have received 81p per share. That’s £271 on a £10,000 investment. In the context of the stock falling almost 27%, that’s not a lot.

But the company has a very good record of increasing its dividend and a lower share price means a higher yield. While the dividend is important, it shouldn’t be the only thing investors concentrate on. What matters most is the underlying business and how much cash it generates.

Over the long term, this is what determines investment returns – including how much Diageo can distribute in dividends. And things haven’t been going all that well recently.

Diageo’s difficulties

Diageo has been contending with some significant challenges. These include the rise of anti-obesity medication, the threat of US tariffs, and a weak macroeconomic environment.Some of these issues look temporary.

Macroeconomic weakness in places like Latin America and the Caribbean probably shouldn’t change a long-term investor’s view of the stock. Others however, are more durable. GLP-1 drugs are probably here to stay and investors need to think carefully about what the likely impact of these is going to be on Diageo’s business.

Things like US tariffs are a bit harder to judge. Exactly whether and for how long they will be implemented is difficult to assess, but they seem unlikely to be permanent.

Investment analysis

Diageo’s difficulties are real and should be taken seriously, but they all have something in common. They’re all to do with demand in the wider industry, rather than supply challenges. In other words, the company’s competitive advantages are still intact. And investors might think this is the most important thing, whether the issues are temporary or permanent.

All industries go through downturns. But when this happens, the strongest businesses generally tend to do better than their rivals – and I think this is a positive thing for Diageo.

Even if the problems prove to be durable, strong brands should still give the company a chance to grow its market share. So I think there are still good reasons for investors to be optimistic.

Greed or fear?

Billionaire investor Warren Buffett is known for saying that the best returns come from being greedy when others are fearful. But investing isn’t as straightforward as this. Sometimes, the stock market has good reasons for being pessimistic. And piling into a stock without paying attention to the risks isn’t a good idea. 

Diageo’s definitely contending with some genuine challenges at the moment, which can’t just be ignored. But with its long-term competitive position intact, I think it’s worth considering.

Many people in the UK are already generating tax-free passive income through a Stocks and Shares ISA. And given that there are thousands of investors with ISAs worth well over £1m, a fair few of those will likely be funding their lives entirely through their portfolios.

In this article, I’ll look at how much passive income a 30-year-old could potentially earn in retirement if they were to invest £700 a month. 

Please note that tax treatment depends on the individual circumstances of each client and may be subject to change in future. The content in this article is provided for information purposes only. It is not intended to be, neither does it constitute, any form of tax advice. Readers are responsible for carrying out their own due diligence and for obtaining professional advice before making any investment decisions.

Sitting in Cash

First, let’s see how much someone would have by the age of 68 saving £700 a month in a Cash ISA. Starting from scratch at 30, they would end up with £475,686.

Now, I should say we have no idea what the average return on cash will be over the next three to four decades. After the 2008 financial crisis, interest rates fell to near-0%. More recently, they’ve been above 4%. For simplicity’s sake, I applied a rate of 2% above, which would translate into £9,513 a year in income at retirement.

Also, there has been widespread reports that the government is planning to reduce the annual cash ISA allowance (possibly down to £4,000 from £20,000). That should presumably make a Stocks and Shares ISA relatively more attractive.

Investing in stocks

According to Moneyfacts, the average rate of return for a Stocks and Shares ISA over the past decade is 9.6%. That chimes with the long-term average of global stocks, which is about 10%.

Of course, the return for an individual could be far more or less than that, depending on how well their investments do. But I think a great foundational investment to consider for a portfolio is the iShares Core MSCI World UCITS ETF (LSE: SWDA). This exchange-traded fund (ETF) offers investors broad exposure to around 1,395 global companies within 23 developed countries.

Over the past 10 years, the total return (in US dollar terms) has been 10.6%.

The top five holdings today are Apple, Nvidia, Microsoft, Amazon, and Facebook owner Meta Platforms. This reflects the fact that these are the largest companies in the world.

However, while around 27% of an S&P 500 index tracker fund is invested in these five tech giants, that falls to less than 19% for the iShares Core MSCI World ETF. Therefore, this option gives better portfolio diversification.

Outside of the big tech staples, investors would also get exposure to blue-chips like AstraZeneca and HSBC, as well as fast-growing software firms like Palantir.

One risk to be aware of here is that the IT sector makes up 25% of the ETF. If this area of the stock market were to sell off, the ETF’s performance would suffer. And there’s a risk that AI spending could slow, impacting the earnings of large holdings like Nvidia.

How much passive income then?

If a Stocks and Shares ISA returns 10% over time, it ends up being worth far more than £475k. In fact, the total value would be more than six times higher at just under £3.2m (excluding platform fees).

It’s truly amazing that investing the equivalent of £161 a week can lead to a multimillion-pound ISA!

So, how much passive income could a portfolio this size be generating each year? Roughly £192,000, assuming a 6% yield.

Helium One‘s (LSE:HE1) a penny stock that appears to be stuck in a bit of a rut. While the company patiently waits for approval of its mining licence application in Tanzania, its share price has been treading water.

Investors know that if the company is to fully exploit its Rukwa mine, it must first get government approval. Then it’ll be in a better position to raise the necessary funds to help fully commercialise production.

The wait’s frustrating because the company knows there’s gas deep underground.

Another potential opportunity

Meanwhile, attention has moved to its 50% “working interest” in the Galactica-Pegasus helium development project in Colorado, United States. It’s operated by Blue Star Helium, a tiny Australian-listed company with a current (21 February) market-cap of £4.75m.

And there have been some developments recently. Six of Helium One’s last eight stock exchange announcements have been about the American mine.

Firstly, in the middle of December, it was reported that bad weather had delayed the drilling of the planned development wells. Then, just before Christmas, it was confirmed that everything was in place to commence work. A further weather-related delay was subsequently announced in January, leading to a decision to gravel the roads leading up to the site.

However, the most recent release is more positive and says that drilling should start shortly. Encouragingly, it appears that everything remains on schedule to extract helium in the first half of 2025.

The company’s directors and shareholders will be relieved because it’s likely to take 12 months — from the granting of the licence — before Rukwa’s fully operational.

Future prospects

It must make a pleasant change for shareholders to see news items about operational matters rather than financial ones. That’s because the company’s repeatedly had to ask investors for more money.

When it first listed, it had 497m shares in issue. Today, there are 5.92bn in circulation — nearly 12 times more. And with its mine in Tanzania requiring an estimated $75m-$100m to start generating revenue, and the Galactica-Pegasus project likely to require some more cash, I think extra shares will have to be issued soon.

To try and avoid this scenario, the company’s directors are talking to potential industry partners — and banks — with a view to providing the necessary finance, but there are no guarantees these negotiations will be successful. And that’s a major problem for me.

On the plus side, the demand for helium’s rising and it can’t be manufactured. This has helped drive its price higher. Also, there’s no spot market for the gas. Instead, prices are negotiated on a contract-by-contract basis. Experts reckon it’s now 100 times more valuable than natural gas.

However, mining’s notoriously difficult, especially in rural Africa. The Rukwa, South West Tanzania field is 80 miles away from the nearest town.

And until Helium One’s projects are fully funded — and its mining licence in Africa has been granted — an investment would be too risky for me.

BAE Systems’ (LSE: BA) share price showed little reaction to the 19 February release of its full-year 2024 results. This might have appeared odd to the casual observer, given how good the numbers were.

In my view, it reflected two factors. The first was the 8% run-up in price in the two days before the results announcement. Overall, it’s gained 105% from 24 February 2022 when Russia invaded Ukraine.

In short, much of the passive price reaction to its results looked like simple profit-taking to me.

The other part comes from a view in the markets that the world may become more peaceful, in my opinion. After all, negotiations are afoot to end the Russia/Ukraine war and there’s a truce in the Israel/Hamas conflict.

Are the bearish stock factors short term only?

I believe neither of these bearish share price factors will last much longer.

I think much of the expected profit-taking has washed through the share price in the past couple of months. And I believe any settlement to the Russia/Ukraine war reached without input from Ukraine and Europe won’t last. Even if it did, European NATO members are now on high alert for further Russian aggression on their borders.

This will result in much higher defence spending. NATO Secretary-General Mark Rutte now expects over 3% of member countries’ gross domestic product to be allocated to this. US President Donald Trump has called for the figure to be increased to 5%.

Even to reach the current 2% target, estimates are that €1.8trn (£1.5trn) must be spent to compensate for 30 years of underinvestment.

The current truce between Israel and Iran’s proxies, Hamas and Hezbollah, also looks highly fragile to me.

What does this mean for the stock?

As Europe’s largest defence contractor and the world’s seventh biggest, BAE Systems should benefit from increased spending.

A risk to the firm is any major fault in one of its key products. This could be costly to remedy and could damage its reputation long term.

However, consensus analysts’ forecasts are that its earnings will increase by 7.2% each year to the end of 2027. It’s this growth that ultimately drives a firm’s share price (and dividend) higher.

That said, these bullish forecasts look on the low side to me. In its 2024 results, BAE Systems said it expects its earnings to grow 8-10% in 2025. It also forecasts its sales to rise 7-9% over the period.

In 2024, its earnings jumped 14% year on year to £3.015bn, with sales increasing the same level to £28.335bn. Profit rose 4% to £2.685bn.

Will I buy the stock?

Given the operational backdrop and the earnings growth potential, BAE Systems’ share price is an irresistible buying opportunity for me and I will be adding to my existing holding very soon.

To establish a price target for me to buy, I ran a discounted cash flow analysis. Using other analysts’ figures and my own, this shows the shares are currently 51% undervalued at £12.61.

Therefore, their fair price is technically £25.73, although market vagaries could push them lower, or higher.

Shares in FTSE 100 ‘Big Four’ bank NatWest (LSE:NWG) have jumped 97% from their 26 February one-year high of £2.30.

Some investors might think the stock cannot keep rising after such gains, so avoid it. Others may see the price momentum as unstoppable, so buy it. 

As a former investment bank trader and longstanding private investor, I think neither view is conducive to optimising investment returns. My key question on a stock’s price is whether there is any value left. I am also interested in the added yield income it could provide me.

Is there value left in the stock?

My starting point in assessing whether NatWest’s price fairly reflects the bank’s value is comparing valuation with its competitors. On the price-to-earnings ratio, it currently trades at 7.8 compared to its peer group average of 8.4. That is bottom of the group that comprises Barclays (at 8), Standard Chartered (8.4), HSBC (8.5) and Lloyds (8.7). So it looks a major bargain on this basis.

However, on the price-to-book ratio, NatWest is presently at 0.9 against a competitor average of 0.8. So it looks slightly overvalued on this measure. And the same applies to its 2.4 price-to-sales ratio compared to the 2.2 average of its peers.

The second part of my price evaluation process assesses where a stock should be, based on future cash flow forecasts.

Using other analysts’ figures and my own, the resulting discounted cash flow analysis shows NatWest shares are 53% undervalued at £4.52. Therefore, their fair value is technically £9.62. They may be driven lower or higher than this by market forces, of course.

There are currently several very undervalued stocks in the FTSE 100, according to my analysis. However, NatWest’s DCF underlines to me that it is one of the most undervalued right now.

How does the yield look?

In its 14 February full-year 2024 results, NatWest increased its annual dividend by 26% to 21.5p a share. This gives a yield of 4.7% on its current £4.52 share price, against the FTSE 100’s 3.5% average.

So investors considering a £10,000 stake in the bank would make £5,985 dividend income after 10 years and £30,847 after 30 years. These numbers are based on the current 4.7% average yield and on the dividends being reinvested back into the stock (dividend compounding).

That said, analysts forecast the bank’s yield will rise to 5.4% in 2025, 6.1% in 2026, and 6.9% in 2027.

How does the core business look?

A key risk to the bank remains a continued decline in UK interest rates, I think. This could weigh on its net interest income (NII), which is the difference in interest made between loans and deposits.

However, its 2024 results saw national investment income (NII) increase 2% year on year to £11.275bn. This helped drive profit up 3.9% to £4.811bn.

Consensus analysts’ forecasts are that NatWest’s earnings will rise 1.5% a year to end-2027. And it is ultimately this growth that drives a firm’s share price and dividend higher, over time.

Given this and its already very undervalued share price and good yield, I will be buying more of the shares very soon.

I’ve been looking around for shares to buy for my Stocks and Shares ISA next month. One that has piqued my interest is Roblox (NYSE: RBLX), especially as I’ve been spending time in its virtual worlds with my daughter.

Plus, I’ll no doubt be spending money in there soon, as she keeps asking for Robux (the firm’s virtual currency that allows players to buy in-game items and premium features).

My thinking here is that if I’m going to be forking out for Robux (along with millions of other parents), then I might as well own a small part of the company. That way, at least I can benefit in its success, assuming the stock does well.

Things I like

For those unfamiliar, Roblox is an immersive gaming platform loved by millions (mainly children). The firm doesn’t create the virtual worlds, but instead gives developers the tools to make their own. It then takes a 30% cut of each Robux spent on the platform.

In that respect, it’s a bit like YouTube, where users generate content. I do like asset-light platforms like this because they can be wildly profitable at scale (as Alphabet-owned YouTube is today).

Currently, Roblox doesn’t break out advertising revenue, but it already has shopping ads and virtual billboards. Many new movie releases are now being advertised on the platform. However, while advertising has immense long-term potential, it must be rolled out thoughtfully so as not to ruin the user experience.

Roblox has done a great job of growing its user base following the pandemic-fuelled gaming boom. In Q4 2022, it had 58.8m daily active users (DAUs). By Q4 2024, that had grown to 85.3m, representing 19% year-on-year growth and 45% more than two years earlier.

Somewhat confusingly, bookings (not revenue) tend to give a better picture of the money being spent on the platform. This metric, which is essentially a form of deferred revenue, has risen from $2.9bn to $4.4bn in two years.

The firm isn’t posting positive bottom-line numbers yet, but it does expect to generate between $800m and $860m in free cash flow this year.

Things that worry me

Over the long term, Roblox aims to have 1bn DAUs. Yet the vast majority of users are still children (over 32m are under 13 years old), and I don’t see that changing dramatically any time soon.

On a serious note, it worries me that Roblox has previously faced child grooming incidents on its platform. Despite investing heavily in safety measures, the risk sadly remains ever-present. It was partly why Turkey banned Roblox last year.

Another thing to note is that Roblox issues a massive amount of stock-based compensation ($1bn last year). While it’s not a cash expense, it still dilutes shareholders and remains a real cost.

Finally, the DAU figure in Q4 — the Christmas quarter — was down 4% from Q3. Is this a trend? Only time will tell, but it’s an amber flag for me.

My decision

Weighing things up, I’m still on the fence. So what I’m going to do is follow Roblox’s next couple of quarters to see if they impress me.

Who knows, I may yet be a shareholder by the time Christmas comes around and I’m putting Robux gift cards under the tree!

Despite owning some superstar shares, I’ve made my share of investing mistakes, because some stocks become shocks. My latest horror show lies in the FTSE 250.

My FTSE flop

I’ve just conducted a review of my family portfolio — which includes 27 individual shares — to find our winners and losers. While I’m delighted at the ‘jumpers’, I need to watch the ‘slumpers’.

We hold seven mega-cap US stocks (including four of the ‘Magnificent Seven’), six of which have done incredibly well. Our UK holdings include 15 FTSE 100 shares, plus five FTSE 250 stocks.

Among our five mid-sized company stocks, we have two big winners. These businesses are being taken over at large premiums to our entry prices. Hence, we need to decide where to invest this cash when it arrives. Two other shares are doing okay, but nothing fancy.

My FTSE 250 flop

Now for by far the worst share I have bought in the last 15 years. Winner of my wooden spoon for investment performance is financial firm Close Brothers Group (LSE: CBG). Founded 147 years ago in 1878, Close is a mid-tier player in merchant banking, business and consumer lending, wealth management, and securities trading. It first listed its shares in London in 1984.

The past five years have been brutal for Close shareholders. Close to its all-time high, the share price closed at 1,685p on 12 March 2021. Unfortunately, it’s been steeply downhill for this stock ever since. Currently, the share price stands at 320p, valuing this business at £488m — a shadow of its former self. Over five years, the stock has collapsed, plunging 77.8%. Over one year, the decline is 1.1%.

That said, things have been a lot worse for Close shareholders, including me. At their 52-week low on 13 November 2024, the shares crashed as low as 179.83p, before bouncing back to current levels.

What crashed Close?

We bought Close for its attractive dividend yield. At our buy price of 790.8p, this cash yield was 8.5% a year. Then it cancelled its dividend in a shock announcement on 15 February 2024.

Sadly, the stock fell into a sinkhole last year, driven down by Close’s involvement in a growing mis-selling scandal involving car loans. For many years, it allowed car dealers to charge customers higher rates of interest, without revealing these hidden charges to buyers.

The Financial Conduct Authority is conducting a wide-ranging regulatory review of this issue, while several important legal cases around this mis-selling are going through the courts. Estimates for potential consumer compensation run into tens of billions of pounds.

I bought Close thinking it was a classic ‘fallen angel’ stock, but it turned out to be a little devil. My biggest regret is that I didn’t sell out as soon as this reputational issue emerged in 2023. To date, we have lost 59.5% of our investment, leaving less than two-fifths remaining.

Do I sell our holding in this floundering FTSE 250 business? To be honest, I don’t know, as I’m equally pessimistic and optimistic about this company’s future. If key court cases go Close’s way, then total compensation could be greatly reduced. Close is also selling its wealth-management arm for up to £200m. Hence, we’ve decided to sit tight and await developments!

The last five years has been a disaster for long-term owners of Vodafone (LSE:VOD) shares.

The FTSE 100 telecoms giant has suffered sales weakness in key European markets, high operating costs, and soaring debt levels that have forced it to cut the dividend.

These pressures have seen Vodafone’s share price topple 57.6% since early 2020 to current levels of 65.68p. This means someone who invested £10,000 in the business five years ago would now have a stake worth roughly £4,238.

However, CEO Margherita Della Valle has a plan to turn things around. And she’s been making solid progress since becoming the telecoms titan’s chief two years ago.

While they’ve proven a disaster for many investors in the past, could now be a good time to consider buying Vodafone shares?

Bold strategy

So far on Della Valle’s watch, Vodafone has hived off its underperforming Spanish and Italian assets, the proceeds of which have been used for share buybacks and to pay down debt.

Following last year’s sale of Vodafone Spain, net debt fell by $1.4bn in the 12 months to September, to $31.8bn. The sale of Vodafone Italy was completed shortly afterwards.

The firm’s also vowed to double-down on the Vodafone Business arm and is embarked on extensive streamlining to cut 11,000 roles from its global workforce (though admittedly, the company still has a lot of heavy lifting to do in the final year of its job-reduction plan).

Finally, Vodafone UK has successfully got its merger with industry rival three over the line. Della Valle has said the deal will “complete our programme to reshape the group for growth“.

Opportunities and risks

With Vodafone now much closer to its CEO’s vision, the firm looks to me better placed to exploit its enormous market opportunities.

As our lives become increasingly digitalised, demand for telecoms services is tipped to rise strongly, even in mature markets like Europe. Growth is likely to be even greater in Africa, where the FTSE firm offers mobile and financial services.

Yet while it’s in a better place, Vodafone still has a number of challenges to overcome. Competition remains fierce across its markets, while capital expenditure costs are severe, impacting the company’s path of debt reduction.

Vodafone also has a job on its hands to turn around its ailing German market following recent changes to bundling laws.

Latest financials showed group service revenues up 5.6% between October and December. But in Germany, the company’s single largest territory, they reversed 6.4%.

Attractive value

Following years of pressure, City analysts think the business is poised for a sharp rebound. They think it will record another 13% earnings reversal this financial year (to March), before enjoying strong growth of 18% in both fiscal 2026 and 2027.

These forecasts leave Vodafone shares trading on a low price-to-earnings (P/E) ratio of 8.5 times for the upcoming financial year. This may make it attractive to value chasers, with its 6.4% forward dividend yield providing a juicy bonus.

As mentioned, Vodafone still has considerable problems to overcome. But given the cheapness of its shares and enormous long-term opportunity, I think the FTSE 100 firm could be a top recovery play to consider.

A £10,000 investment in BT Group (LSE:BT.A) shares would now be worth roughly £11,300, combining modest capital growth of 3.2% with dividends. While this return outpaces inflation, it underscores the telecoms giant’s struggle to deliver meaningful shareholder value.

Uncertainty galore

BT’s stock has lagged the FTSE 100, weighed down by of soaring debts, relentless capital demands, and uncertain profitability timelines. The company’s story is one of balancing long-term infrastructure bets against near-term financial strain. This tug of war has left some investors uncertain.

BT’s challenges start with its balance sheet. Net debt ballooned to £20.3bn by late 2024, fuelled by pension obligations and its fibre broadband rollout costing tens of billions of pounds. The pension deficit alone requires £780m in annual payments until 2030, while dividends cost another £800m yearly.

These outflows compete with the capital needed to expand BT’s fibre-to-the-premises (FTTP) network, which aims to reach 30m UK homes by 2030. Though progress is has been significant — 16m premises connected by late 2024 — low customer take-up rates (just 35%) delay profitability. Fibre’s pay-off depends on scale, but BT’s debts and legacy costs keep investors cautious.

Analysts are split

Analysts are split. Optimists highlight CEO Allison Kirkby’s aggressive £3bn cost-cutting plan, targeting lay-offs and operational streamlining to offset fibre costs. Falling interest rates could also ease BT’s debt burden, freeing cash for reinvestment. With shares trading at a relative bargain eight times earnings, some see 25% appreciation potential to the average price target of £1.85.

Yet skeptics, like Citi, warn of deeper risks. The bank recently downgraded BT to Sell, slashing its target to 112p over concerns that Openreach — BT’s infrastructure arm — faces revenue declines by 2026.

Citi also doubts BT can hit its £3bn free cash flow target by 2030, citing unrealistic cost assumptions and shaky consumer pricing power. Investors should also bear in mind that the price-to-earnings figure above doesn’t take net debt into account.

Clear potential, but risks abound

For investors seeking income, BT’s 5.4% dividend yield is clearly tempting, and management insists payouts are sustainable. Unfortunately however, analysts don’t see the payout rising at all. That’s simply a reflection on the company’s financial position.

More generally, the stock’s long-term appeal hinges on executing its fibre vision without drowning in debt. Kirkby’s restructuring aims to transform BT into a leaner, UK-focused infrastructure leader, but legacy pension and workforce costs linger.

As such, the investment hypothesise boils down to patience. BT’s fibre rollout’s a decades-long bet on Britain’s digital future, but shareholders must endure years of financial turbulence. It’s a high-stakes wager, emblematic of the broader dilemma in valuing capital-intensive telecoms: promise versus peril.

Personally, I was pretty bullish on BT when it dropped to £1, but I missed the chance to buy. There’s some margin of safety now, but given recent downgrades I’m a little more cautious than I have been. In short, I should have bought a year ago when I first touted the stock. Either way, this stock is remaining on my watchlist.