Re: [CANSLIM] Qwest research

From: "Tom Worley" <stkguru@bellsouth.net>
Subject: Re: [CANSLIM] Qwest research
Date: Wed, 25 Dec 2002 07:18:47 -0500
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I noted on the chart that the number of mutual funds holding "Q" has been
steadily dropping for the past year, so I would agree with you on the lack
of institutional interest. With the combination of the FCC approval on
Monday, and the completion of the "bond swap" to lower their debt, this
could change, but the forecast of continued losses for 2003 doesn't paint
this company in a positive way.

Here is an excerpt from one story at Yahoo on all this. It appears that the
bond swap was accomplished under the threat of possible bankruptcy, and a
lowering in standing of the creditors if that occurred.

"Qwest, which has been trying to stave off bankruptcy, said on Monday that a
new entity, Qwest Services Corp., issued $3.3 billion of new bonds in
exchange for about $5.2 billion of existing bonds issued by Qwest Capital
Funding. Qwest said its debt load fell to about $22.6 billion from $24.5
billion.

Analysts said the transaction gives Qwest -- which has suffered from stiff
competition, too much high-speed network capacity and weak demand -- greater
financial flexibility. Qwest is also selling its profitable QwestDex phone
book business for $7.05 billion.

S&P nevertheless viewed the bond swap as a "distressed exchange." It cut
Qwest's corporate credit rating two notches from "CC" and Qwest Capital
Funding's debt rating one notch from "C."

Some bondholders had challenged the swap as "coercive," saying that Qwest
was forcing them to exchange their bonds at below face value, or else fall
lower in the pecking order for repayment in case Qwest went broke. A federal
judge last week denied their motion to block the exchange."

- ----- Original Message -----
From: <Spencer48@aol.com>
To: <canslim@lists.xmission.com>
Sent: Wednesday, December 25, 2002 2:36 AM
Subject: Re: [CANSLIM] Qwest research


pshah:

     I don't want to argue the point.  This is just how Q appears to me:
You
could be right; however, I think you are wrong.  Q is not in a bullish mode.
Here is why I think that:

Earnings, and even projected '03 Earnings, are negative;

There is A LOT of overhead resistance (I believe that both these points
support the fact that institutions will not invest in Q.  They would have
bought Q in the 90's when "Romance" of internet stocks was in full bloom,
but
I don't believe they would now.  Earnings are what will propel the stock
tomorrow, not fanciful notions);

One could argue that Q has made a V-shaped cup, but going from about 1 up to
4½ is not my idea of a rally (the cup's subsequent trough should be a
correction from an immediately preceding rally).  To me the chart looks like
a rally correction of an ongoing downtrend.

I'll never understand (although I probably did it myself) the novice's mad
love affair with technical analysis for technical analysis's sake.  If
something isn't kosher, why acceed to it?  For example, you say that the RS
has been increasing, gapping up on higher volume and "not violating the
gap".
 I say: Big Deal.  This just says that the stock is doing better than the
market-so the question becomes why choose this stock over others with better
and more powerful RS-Lines?
     Also, what is the connection between your implication that the stock is
strong because the RS-Line did not violate the gap?  In my opinion, the
RS-Line is not the stock; the only thing that can be read in the RS-Line is:
that it is steep, that it is level or that it is plunging.

     As I said, you could be right and I could be wrong.  However, a
successful stock picker must not only learn so that he/she can understand
chart analysis, but also he/she must be able to view the  chart
realistically, and understand what is and what is not significant (even
though a lot in the chart may actually be relevant).

jans





In a message dated 12/25/2002 1:34:53 AM Eastern Standard Time,
pshah@lason.com writes:

<< To me the chart looks very bullish. Ofcourse, I am inexperienced >>

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