Hi Yogi,I can't find anything to suggest what has happened to...

Hi Yogi,

I can't find anything to suggest what has happened to NTG today. Nothing in the Midday Report from OzEquities. Still searching though.

Interestingly, I looked closely at NTG on 20/9, when it fell to $1.12 (touching $1.08). In the days following this, the stock rebounded to a 1.24 close on 3/10.

The reason for my interest at the time followed an earlier comment that I had made on the forum (circa 20/7).

At the time, I suggested that NTG was "interesting (and I have been there before) but is currently at the pricier end of the market". At the time, the stock was trading in the $1.50 range.

I did not, however, go into NTG due to marketing, sectoral and business strategy concerns. That was then, but then September came along, and again I looked closely at NTG, but did not invest.

Why?

Because, at the time, I was concerned with the manner in which NTG's revenue recognition practices were being played out. From an industry perspective, they appeared aggressive in approach, and inconsistent with the comparative approach being taken by CDR.

At the same time, I also did not like some of the media focus that was being placed on NTG (ie: over governance, probity, supplier representations, etc).

The Board was also not telco centric.

That said, NTG's cash balances and generally robust Balance Sheet remained then (and still remains) of interest to me.

All things considered, I passed up on the opportunity in late September, for SLX instead. I did not, however, at the time ever think that NTG could fall to today's new lows. This bears further investigation.

That said, I also took a look back at some of the other comments that I made in my 20/7 posting (see below):

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Subject re: Is this the crash or just the start?
Posted 20/07/02 19:17 - 1 reads
Posted by Grant62
Post #6246 - in reply to msg. #40021
Hi Bomber,

It's a constant effort trying to keep anything in the green. But, with study, research, patience and careful selection, I have found that you can keep things near to green.

Overall, I have been very tempted to sit things out, and keeping with the sectoral trend, but generally have not done so. Currently, I am back in the sector, primarily at the smaller end.

The main thing to consider though is that the telco sector is made up of many parts, big, small and indifferent, and it is this variation in activity and composition that needs to be understood and worked upon.

When the major stocks (such as TLS, SGT and TEL) are out of favour, smaller sized stocks such as HTA, PCO, and others are generally in favour.

Currently, I am out of TLS, TEL and HTA, but in SGT, PCO, and CDR.

NTG is interesting (and I have been there before) but is currently at the pricier end of the market.

UEC is a very disappointing stock which carries with it such an investment overhang that it will struggle in the 15 -20c range.

My previously submitted thoughts on this particular stock have not changed, despite the fact that H1 revenue is likely to be strong (refer 4/6 HC posting where I commented: "...Q2 will be quite good for the Company with likely sales of >$16m, including >$10m in recurrent sales (up 25% on Q1), and attribution to revenue of the $6.0m Lucent payout".

ATC is a stock that I am not at all interested in, and have not been in, to date. The FNT merger may well be good for ATC going forward, but growth in the UK and European pre-paid markets have now peaked, whilst in China, the ARPU values are quite low (sub US$16 -17).

PWT is a stock at risk, primarily because of the Williams overhang. But, it is interesting to note that Downtown Utilities remains a strategic investor in PWT. With CKI (part of Li ka Shing's Cheung Kong group) having now bought CitiPower, this means that Cheung Kong (and more indirectly, Hutchison Whampoa) now has a say in the future workout scenarios for PWT. On this, I would consider consolidation of the broadband fibre industry accelerating during H2. More, on this, in a later posting.

AMM is a stock which has potential going forward, but unless AP1 is a success, AMM will struggle to lift itself out of the mid-teens (unless the industry consolidation option emerges).

MAQ, is like UEC, a chronic under-achiever in the sector which is unlikely to be rectified anytime soon. Same also for PWR.

.................

6)
currently, I favour SGT, PCO, CDR, and NTG (on any pullback in its share price), and have started to rebuild my positions in some of the overseas telco stocks (US and in Europe).

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To balance out the equation, the following summary is provided:

IN (@20/7):
SGT (then $1.45, now $1.26 - 20/7 to 9/12 - down);
PCO (then .071, now .047 - down);
CDR (then .79, now .80 - balanced)

OUT (@20/7):
TLS ($4.75 TO $4.54 - down)
TEL ($4.23 to $4.12 - down)
HTA (.36 to .265 - down)

COMMENTED ON (@20/7):
NTG ($1.50 to .51 - down)
UEC (.11 to .135 - up)
ATC (.275 to .125 - down)
PWT (.056 to .056 - balanced)
AMM (.10 to .088 - down)
MAQ (.082 to .09 - up).
PWR (.072 to .055 - down).

Clearly, in the ~5 months since my 20/7 posting, telco sentiment has remained negative, although individual short term opportunities have continued to abound (in HTA, in TEL, in TLS and in SOT). Nothing, however, should ever get in the way of doing the detailed background research (and continuously doing this in order to remain updated).

No-one is suggesting that this is an easy market to analyse, interprete or comment upon. It is, however, a market in respect of which vigilance must continue o apply.