I know there's an existing thread for TEP, but I'm blowed if I can find it.
Anyway, things aren't looking too good for this share at the moment. Been on a downward spiral for some weeks, after hitting over 4.
Very low volume today, and sells seem to equal buys, so why the continuing drop? Seriously thinking of getting rid, and taking what is now a very small (and I mean small!) profit.

Any experts on TEP like to add their two pennorth?

Princess

All quiet! Everyone away licking their wounds! No, we didn't expect to see 2 again. A far cry from 4 in January. I'm still trying to weigh the future but would make the following points:
1. The dividend has been increased which should rule out any cut at the finals.
2. If you look at the financials the final results look a bit tight on the surface. 4m losses on gas have to be absorbed. A repeat of first half performance just about leaves enough to cover the dividend. Thus the confidence in management with the interim increase does say a lot.
3. Two negative points re the sp. (a) The closing price is down over 50p with less than 1% of shares sold, so there could well be selling volume in the wings. Why should buyers come back in at this stage? (b) Its all too common for a second lot of bad news to follow the first; TEP could be an exception, but most, including myself, will want to see evidence before climbing back in.
4. Two positive points re buying opportunity. (a) Take the financials at face value, the cap. is down to 124m; the pe is down to 16.5 (and should be maintained if dividend is to be covered); price to sales likely to be about 1.2 and peg still below 1; yield around 5%. We have a short-term problem (2 years, OK, but still short-term) against a backcloth of continued growth. (b) Given the sp continues to take a battering as those of a nervous disposition get out, together with bear selling, the price could drop further until there is a compelling case for getting back in.

My conclusion is that there is likely to be a really good buying opportunity fairly shortly, either for short-term gains or as a medium-term investment. The TEP sp over-reacted on the way up and is likely to over-react on the way down. In the end of the day, the business model is superb and this share is going places (and not just down to hades!). Other perspectives?

Eric

My sympathies are with you eric. Cheerup cos whether we like to admit or not not we have all been there. My classic example. is WLF. bought in @170+ topped up @185 and then bang they went to 99p. like u said u win some and u lose some.

On the TEP front where do you see it stopping. The main negative is that the gas issue is going to be an ongoing concern. Agree good for med/long term

Citywire Verdict:
We tipped the shares in May 2002 as a good buy at 109.5p and suggested taking a 'careful look' at whether to book some profits at 268p last November.

Todays news is clearly disappointing, although not entirely unforeseen. Operationally, everything else seems to be going to plan, and Wigoder, whose previous successes include founding The People's Phone Company, which he sold to Vodafone in 1996 for 77 million, is passionate about building a far bigger business still.

It is not surprising that investors have wanted to lock in some profit today, and that is always a wise move. However I do think this is a nasty short-term blip and one from which Telecom Plus should recover in good shape.


http://www.citywire.co.uk/News/NewsArticle.aspx?VersionID=70720&MenuKey=News.Home&NewsPage=2

azhar

Thanks for the sympathetic tone: I suspect that others need it just as me - got a windfall of about the same amount from shares I hadn't even paid for! The Citywire post is good; the phrasing puts the blip into perspective. Charles Wigoder, the Honourable no less, is a winner!

Eric

The underlying tone of the Citywire Verdict is positve and I see TEP as a good long-tern investment. As a trader, rather than an investor, the key question for me is: whither the gas hedging problem. Is it reasonable to understand the situation as follows:-

TEP's problem was failure to hedge gas prices. They are now hedging prices but are left with contract(s) with which they are exposed. There is a one-time hit of 4m pounds in the second half. The problem will also affect next year but will then be worked out. My question is whether therefore that is the sum pof the bad news. Can there be further bad news which could lead to another profit warning? I suspect and hope not but would apprecaite the view of someone who uinderstand better the whole process of hedging futures gas prices.

That is the fundamentalist's issue. What does the chartist say about the graph which looks as though it may need to go further down. How far does the RSI need to recover to give a BUY signal? Could we be returning to thte 2002 trend line?

Eric

Any idea on the slump now then boys! TEP are quality and surely this is a gross misjudgement of their value??

The fly in the ointment is the possibilities of losses on gas is part of their problems because the had not "hedged their purchases" (Check tis last statement but that was my understanding of bulletins) Looking at the TA I think you may see 215 p and if it breaks that resistance 202p beforeit bounces back. I think it hit 230p to-day for a short while on relatively small volumes before rebounding slightly.

I think I would take another gamble on it if it drop to about 200p as the dividend/yield if sustained as promised is good. But watch out if interest rates go up as suspected.

Back down below 200. looking interesting again. Any ideas to the next entry point?

If you had bought at 192 earlier to-day, you would have a profit, but might drop to 185p. Wouldn't touch it as a long hold unless the down trend breaks for 2-3 days. Interesting as it has a yield of about 6%.

customer service of this co is crap sent email they replyed it will take 5 working days for response,phoned after that waiting time to speak to someone was 18 mins i hang up.

Woodie I agree,customer service is not crap it is non existent,I have my gas and electric with them,they are a bit cheaper than most but try to get an estimated reading corrected,forget it and every time I have rang I reckon I've lost any saving I might make by being on hold forever,18 minutes mate,luxury.
wouldn't touch the shares even with your money.

No satisfying some. TEP has serve me well.

T+ now 176 surely this has been overdone. Any views, next support etc.?

Agree with customer service comments, they really need to get their act together
it is very poor in my experience
In order to compete with other Companies they must reduce prices and give a good service to the customers
Reducing prices must in turn reduce the distributors commissions, who along with the customers, are the life blood of the company.
So where does that leave the business ?

Agree rampage

Also recruiting more distributers means more levels of distributers comission. It is a pyramid system. The distributers are also the life blood of the company when initially joining the company gets their relatives and friends to sign up to the services then encourage to be distributers themselves and the cycle goes on.......The first distributers recruited (stitting on the top of the pyramid or the people that started it) are getting the best comissions ie a slice of everyone below. I doubt if the distributers will want to cut their commissions as that is the 'goldern carrot" to becoming a distributer.

Something or someone have to give because the cycle cannot continue.

at last i received a reply not the 5 working days stated but 7 to answer a email customer service? make your own mind up.cheers woodie

Looks like we might not see the magic 150. Oh well! easy come easy go. Once the gas issue is resolved these will be heading back to 250-300. IMO

That's just the bottom of the latest down leg - there'll almost certainly be another to come. IMHO.

Anyone feeling more optimistic out there than brianboru about TEP?

Well there was a nice little tick up today which was a pleasant way to end the week.