A fund manager says Chorus shares are so cheap he's started buying them again.
Milford Asset Management portfolio manager Mark Warminger said he sold out of Chorus shares more than a year ago because he was worried about the impact of regulatory decisions.
But now the full impact of the Commerce Commission's decisions that Chorus must dramatically slash its wholesale prices for access to its copper wires has already been priced into the stock.
Mr Warminger said a large international fund has thrown in the towel and is selling a substantial position, making it easy for Milford to build a stake.
He said Milford took the view, well over a year ago, that the Commerce Commission decision would be negative for the share price and that the dividend would be at threat so it was not a cheap yield stock.
Mr Warminger said the firm also believed Chorus would need to restructure its capital management decisions and all of these things have played out.
He said there is now maximum uncertainty which is the point at which stocks such as these start to look attractive and Milford Asset Management has been taking advantage of that.
"We started buying about a week ago, by the end of the day we'll own about 9 million shares across six funds and the average price of around $1.40."
Mr Warminger believes Chorus will now talk to the Government and Crown Fibre Holdings and there could be some solutions around some of the issues in the coming months.
He said if that's the case then Chorus could begin trading at around the $2 level.
