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

What is the bad news on this share? Can't Find Any. Turnover up, Profits up, Dividend up. Know it went ex-dividend 23/6/04 . But forcasts good, business model looks good.

Oh that we had the answer - I like you am totally confused following all the good news you have highlighted.

didn't they say GAS dept profits were severely affected?

Hi Folks,,,like you i cannot understand why it has fallen so low..Maybe it will drop down to the 240 level before picking up,,who knows..It certainly is a time to buy and with our results it is mind boggling why people are asking if this company is worth its price???Glad im not a professional share trader, i would be swinging from a tree right now!!!

Hang tight and hold for long term is my view.

Typlus Guy - If you were a trader and swinging from a tree I have no doubt you would be shaking it at the same time. I have had their telephone provision for 3 months and cut in outgoing is over 50% plus amazing saving with metronet.co.uk as Broadband supplier (only 10 per month for up to 200 MB usage thereafter 0.25p per MB. I am saving so much I can afford to be patient with TEP

I think this share is starting its recovery. Good Pegs, Yield 4.4 -4.9 Well covered. I think the drop in price was over reaction to warning on one part of its earnings.



I have a holding bought at 244p

Bought in @ 241 this am with medium to long term view. Does any one know when the results are out?

Next interims due Dec 2004

I cannot find anything positive in the current chart!

The downtrend looks to be intact.

Andy. A problem with charts relates to the period over which you show it. My vies is that Telecom is in a long term uptrend going back to 2002. The share got somewhat overheated in 2003 and I suspect has now overshot the long-term trend line. MoneyAM only gives you 1 year so this is based on memory; perhaps someone can demonstrate it factually.

I bought TEP in January 2003 around 160p as part of a package of shares based on Shares-assisted research. I decided to also become a Distributor; however I made a lot more money out of the investments so that has gone on the back-burner. I sold out at prices between 330p and 390p around the turn of the year, not because I had lost faith in them but they lost out in contention for funds, primarily to ASOS (ASC). The latter are contender fro share of the year (TEP did pretty well last year); I am sticking with the uptrend but am keeping an eye on TEP, amongst others, for a switch when ASC in turn gets over-heated (which I believe to be inevitable).

My argument is that none of the fundamentals for TEP have changed. The gas market problem was short term based on the small margin between wholesale and consumer prices which we all know is being corrected. Many people don't understand TEP, believing it to be vulnerable to pressures in the utility market. In one sense it is, but this is outweighed by their network marketing model, unique amongst quoted companies. The volume of salesman is growing all the time at negligible cost to the company and they are continually growing the number of services to offer their customer base. I believe thay will continue with their 40% growth rate for the foreseeable future. Yet the PE is down to 20 and the peg factor to 0.25! Price to sales is 1.8. Part of the problem is lack of new flow and it may be that there is nothing much until the interims in December. If these confirm the above projections then they must return to a 2004/5 PE of not less than 20, i.e. a current PE of 28 and a price of more like 340p. Personally, I hope that the rise is delayed so that I have funds to switch in. I actually feel very confident indeed with this perspective so if ann bb reader differs it would be helpful to know. I agree with Fred1new.

azhar and rampage. Having completed the above note, it has struck me as relevant to investing timing that the company's Express Day, attended by well into four figures of delegates, is on 17th October. This is times partly to allow the half-year figures to be discussed; these are then effectively in the public domain. Last year there was an announcement on 17th September on trading upping the forecast and announcing an increased interim dividend. It may well be, although this is surmise, that news giving encouragement to the share price is with us sooner or later. I hope personally not given that my funds are tied up. One thing I am very positive about is that the shares are currently at the bottom of a trough - see my previous entry for a six month prediction.

EW,

Ok here's the longer term chart.



IMHO the downtrand that started in January this year is still intact.

I'm not sure TEP's business model is as sucessful as is being made out, or at least was, previously. Customer sign up is slow, and the customer base is only growing steadily. As an example, Carphone Warehouse signed up 50,000 landline customers to their service in less than three months, whereas TEP took over 3 years to signup 120,000 customers.

More nad more competition is entering the fray, and now British GAS has achieved the landmark of being the first alternaive telephony provider to BT to provide a complete service to the home, ie they do not require their customers to rent the line from BT!

I am a TEP telephony customer, and I have checked the gas and electric tariffs. and they are not as competitive as they were, but are cheaper then my supplier, and I may well switch. However, they never try and entice me, nothing included with my monthly phone bill to tempt me, which seems strange!

looks nasty. Looking at the director dealings we see even they thought 400+ was a bit too high a bit too quick. They have been adding to anything below 350. Me thinks things should start picking up as todays price is 52 week low and considering that there is nothing out there in the public domain to keep the price down.

Name Date Type Amount Price Value Holding (%)

Charles Wigoder 08/07/2004 Purchase 100000 245 245000 15348541 24.957
Charles Wigoder 06/04/2004 Purchase 10000 313 31300 15248541 24.794
Charles Wigoder 06/04/2004 Purchase 30000 315 94500 15238541 24.778
Keith Stella 30/03/2004 Purchase 3500 323 11305 43500 0.071
Charles Wigoder 30/03/2004 Purchase 10000 324 32400 15208541 24.729
Charles Wigoder 30/03/2004 Purchase 50000 323 161500 15198541 24.713
Dominic Wheatley 22/01/2004 Sale 25000 402 100500 243060 0.386
Peter Nutting 22/01/2004 Sale 100000 402 402000 851750 1.349
Charles Wigoder 03/12/2003 Sale 1325000 350 4637500 15148541 24.88
John Levin 28/11/2003 Sale 30000 349 104700 2257996 3.709

Turnover (m)
2000 19.20
2001 28.11
2002 32.68
2003 58.04
2004 81.83
2005 ?

It certainly looks interesting. Growth year on year. These figures now explain the above graph by Andy.

Andy,
Thank you for the extended graph which bears out my comments. There are several ways of reading this: (1) Project the slow uptrend from September 2001 to sept 2002 giving a current value of about 160p - this would be a cautious view given the improvement in subsequent trading; (2) project the improved uptrend from Sept 2002 to July 2003 giving a current value of about 350p - this would be a reasonable view reflecting the increased trading during the period, subsequently strengthened; (3) Combine those two epriods on an exponential basis reflecting the exponential increase int rading over the period to early 2004, giving a current value of about 400p - an optimistic view that would be only viable if the exponential increase were to be maintained. There is little doubt that the shares became over-heated in the second half of 2003; on any of my projections we would be in a correction phase, probably nearing its end. The missing piece of data, obviously, is current trading levels. My preferred option (2, above) probably implies turnover of between 105 and 115K this year with corresponding pbt increase.

Your comparison with Carphone Warehouse, indeed the supermarkets, is interesting. These services are launched with heavy advertising expenditure and point of sale support. TEP advertising revenue is negligible as they are relying on their distributors, paid on a commission only basis, to introduce new customers. However, their sales increase should be better than a straight line given that each distibutor is also incentivised to introduce new distributors as well as customers and each customer is also a prospect for additional services. I do agree that they do not make full use of their monthly bill for promotional purposes. This month, though, their broadband offering is well explained and I am in the process of transferring, broadband having belatedly arrived in the backwoods of East Sussex. The BG offering is potentially good news as I would guess that TEP are already talking to them (and BT) to reduce their direct costs.

Azhar. Your director purchasing summary is very helpful. I agree with your reading. The director purchases support a price of 3+, with 4 being too soon. For those who bought in at around 4, most certainly hold but better accumulate to bring the average purchase price down. On my projections above, look for 4 later in 2005.

Fred1new. Fascinated by your graphs. What is the source for an explanation? I think the momentum graph is particularly helpful in sorting out the wheat of new investment from the chaff of short-term trading and price manipulation by market makers.

Eric

EWRobson, you may be right. T+ was down further earlier but finished the day in blue.

Hi guys and gals,,what can i say that hasnt already been said..Do not worry about competition and T+'s position for the future..Our results so far have been great and there are many new services planned,although they do take quite a while to roll out.This share in my eyes is long term,we execs really need to do more.

The problem is with new exec sign ups.As prices rise and money becomes tight there are more people looking at a biz with a difference so new execs will always come along,BUT they all want to be rich over night and in Network Marketing this does not happen..They must be patient and learn their craft well to bring in good results..

Anyway,i can only see up for this company,we will just have to wait and see!!

we have movement guys. Recovery has begun as stated above by other posters.

It was tipped in Investors Chronicle today.

No doubt they are right on this one. Well undervalued in my opinion looking at their track record.