The current move appear to be tied to the upgrade of TALK.
Last TALK report was not glowing.
"The upside surprise came even though revenue and gross profits were hurt by fewer orders and expenses from bad debt, the company said"
cbs.marketwatch.com
"Shares in local and long-distance carrier Talk.com (TALK ) shot up nearly 40 percent on whippet-thin volume Thursday after it received an upgrade from Kaufman Brothers to "strong buy" from "buy."
Now at the 50 day EMA. No resistance till 3.20.
207.61.23.98
They are in a tough and competitive business, but appear to be able to grow revenues reducing their loses as a per share.
"We also experienced a slight narrowing of our gross margins during the quarter," continued Mr. Riss. "This was primarily due to temporarily increased carrier costs related to growth in new UNE-P states as we continue our nationwide UNE-P deployment. We believe this trend will continue through the third quarter. However, we continue to enjoy gross margins well in excess of 30% on our established UNE-P customer base and expect our telecommunications margins to trend up to those levels in the long term as our mature customer base grows."
"eLEC Communications Corp. is a publicly-traded local telecommunications company that is taking advantage of the convergence of the current and future competitive technological and regulatory developments in the Internet and telecommunications markets. eLEC provides an integrated suite of communications services to small and medium-sized business customers, including local, long distance, dial-up access, dedicated access, xDSL, and Web site design and hosting. -0- *T "
cnetinvestor.com
6 month chart, there is not real resistance till 3.20.
cnetinvestor.com
Stochastic indicates it is short term overbought and the flat money flow indicates very little buying interest.
3 month chart indicates some accumulation has been happening in the $2.00 area:
cnetinvestor.com
Similar view on the one month chart: If you look at the last 3 trading session you will see the decreasing volume indicating the current move is probably over. Under stable market conditions most moves will last 3 days.
cnetinvestor.com
March 27, 2000
eLEC Communications announced the signing of a definitive merger agreement between its affiliate, Access One Communications Corp. and TALK.com. eLEC owns approximately 18% of Access One on a fully diluted basis. Under the terms of the agreement, shareholders of Access One will receive approximately 14.3 million shares of TALK.com common stock valued at approximately $200 million.
marketguide.com
Loses as a percentage of revenues has been decreasing dramatically the last 6 quarters. Indicating improving fundamentals.
marketguide.com
Not a lot of insider buying at this point:
marketguide.com
In general this company is in a tough business segment. There appear to be making head way as they have reduced the losses as a percentage of revenues while growing revenues very quickly. They still rely on buying bandwidth from incumbent carriers for someo their business, so the FCC ruling for dereglation helps them. But competing against incumbents is still a difficult thing to do.
The article in Barron this weekend on the liabilities of the big equipment makers does not bode well for the carrier segment as well as the equipment segment short term. As interest rates rise and the stock market cools it becomes increasing difficult for the carriers to raise cheap money and that is what they need to continue the build out.
Bottom line, short term this looks overbought. Longer term, it might be too late in the economic cycle to be investing in a carrier, especially a small one. In general at this point, carrier are a license to burn money not make it. |
