TELE - Investment Case

Company	TELE
Company Name	Telecard Limited
EPS	3.07
Fair Price	21.93
Current Price	2.18
Upside Potential	905.90
Quarter	First Quarter
Div	0.1
Fair Value	0.71
Upside Pot	-67.23
Avg	11.37
Upside	421.76
Div Yield	4.59%
Book Value	11.48
OCF/S
P/E	0.71
P/BV	0.19
P/CF	#DIV/0!
Sector	Fixed Line Telecommunication

Let me present TELE as a stock for value (and contrarian) investors. The following are some of the points that I am basing this case on. So bear with me for a few moments and please do present your arguments against this case as this would be certainly of benefit to us all.

• EPS analysis : Last four quarters EPS is Rs 3.07. The P/E for the stock is only 0.71 (which in itself is solid ground for taking investment positions in the company's stock). If we evaluate a fair value on the basis of EPS, it comes out to be Rs 21.93 (two things to consider here, 1- I have not taken any future growth (positive or negative) into account while calculating the fair value; 2- the fair values that I present here may not be achieved in near future (or maybe never for that matter), the main point of presenting fair values is that we have a value to judge the current price against, which was Rs 2.18 on the last closing).
• Dividend : Now TELE is weak on this criteria. During the last four quarters it has paid a dividend of only Rs 0.10 to its investors. So this stock would not appeal much to dividend investors. The fair value based on dividend payout is Rs o,71 and the dividend yield of the stock is only 4.59%. So lets move onto book value evaluation.
• Book Value : The book value per share is Rs 11.48, which gives a P/BV of 0.19 (another strong case for investment in the stock.
• Now if we take averages of book value and fair price based of EPS and dividend, the value we arrive at is Rs 11.37, which gives us a healthy upside potential of421.76% to the last closing price.

So in my opinion this stock should be in every value investors portfolio. When will the investment turn profitable, I simply don't know. Can this investment turn into a loss, yes it possibly can. But keep in mind that at Rs 2.18 per share, TELE is saliva dripping cheap relative to its latest financial (and will remain so until it shows major losses). So for long time investors its a Rico-Dig.

(And yes TELE is in my portfolio and constitutes about 2.58% of my total stocks investment and yes I am currently buying this company's stock).

Happy investing

TELE - Investment Case