Forum Archive Index - February 2003

["winner69 ." <wwinner69@hotmail.com>]

That TLS chart still continues to fascinate me - especially as the stock is 
one of the widest held stock on the ASX and it shows the sentiment of the 
droves.

A lot of people see TLS as a blue chip and in difficult times a reasonably 
safe haven to put their money.

The chart Phaedrus posted would suggest otherwise.

Then I came across this from marketmad.com the other day.

Marketmad.com do blend fundamental views with TA very well. This is from 
their free weekly email so I suppose they don't mind me repeating it, 
especially as it makes a lot of sense.

Is this (basic) fundamental view reflected in the TLS chart - I would say it 
is

Quote (from marketmad.com) -

Blue Chip or False Hope ?

Features define a company as blue chip, not a name.

Blue chip companies are characterised by:

1. high growth business models
2. revenue growth
3. profit growth
4. proven and focused management

Many people have paid the penalty for incorrectly concluding blue chip 
status.

If investors buy companies that meet the 4 requirements, it is difficult not 
to do well, and even in this climate, there are companies that meet all 4 
requirements.

Be careful not to cling to false hope, under the incorrect assumption of 
blue chip status.

See each company for what it actually is, simply by applying the 4 said 
tests.

In this manner, a better result is a fait accompli.

On the 4 tests above, Telstra scores 0 out of 4. Telstra is NOT blue chip.

Have no doubt, Telstra is a dog, on a fast track to nowhere at best.

On a worst case basis, over time, Telstra could easily halve in value.

Given inept management, and the high risk model, it is possible.

In terms of value, the bearish conclusion is confirmed. On the basis of the 
last close, the price earnings multiple is mid teens. Considering that the 
trend for earnings is negative, mid teens is full.

On top of all that, speculation of an earnings downgrade has been rife.

If above 4.72 the story might change, but until then, the outlook is bearish



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